VW’s Diesel Scandal Linked to Culture of Fear

Volkswagen AG's corporate culture under ousted CEO Martin Winterkorn was built on fear that discouraged managers from presenting bad news or debating the merits of edicts from top management, Reuters says.

The news service opines that VW's "unusual" level of pressure may have pushed the company to cheat on diesel emission tests in the U.S. VW has since admitted it rigged 482,000 diesels in the U.S., about 8 million in Europe and roughly 2.5 million elsewhere with software that switched off emission controls. But it declined to comment on the Reuters report.

The news service says VW's management structure has allowed the company's CEO unusually strong power in exchange for protecting jobs in Germany. Winterkorn supporters insist he and other top executives would never knowingly allow emission cheating if he knew U.S. regulatory laws would be broken. But critics say Winterkorn's perfectionism, authoritarian style and and demeaning bluster intimidated underlings and made them reluctant to point out design or production problems.

Winterkorn was a long-time protege of former VW Chairman Ferdinand Piech, who also was known for his domineering management style.