Watchdog: VW Must Learn to “Allow New Ideas and Accept Bad News”

Volkswagen AG’s biggest challenge is to change its authoritarian structure, according to Larry Thompson, the U.S. monitor assigned to VW’s efforts to overcome its diesel cheating scandal.

The former deputy attorney general tells Automobilwoche that VW has made great strides in its certification, test and inspection processes during his first year of oversight. He was appointed to monitor the company’s progress as part of a $4.3 billion criminal settlement last year.

The agreement resolved multiple criminal and civil complaints about VW’s rigging of about 555,000 4- and 6-cylinder diesels to evade emission certification tests. The carmaker admitted it did the same with 10.5 million diesels sold in other markets worldwide, including 8.5 million in Europe.

But Thompson tells the Germany trade paper that VW also must become more accepting of “new ideas and bad news.”

He cautions that future incidents of wrongdoing are inevitable at VW, citing studies that indicate about 5% of any company’s employees behave unethically when presented the opportunity.

“There will be another incident,” Thompson says. But he adds that his aim, and that of senior VW management he works with, is to ensure the company will be able to reduce the risk of wrongdoing and respond faster and more openly when it occurs.