Ferdinand Piëch, the immensely powerful former chief of Volkswagen's supervisory board, is more than likely the root cause of the VW diesel-emissions scandal. Whether he specifically asked for, tacitly approved, or was even aware of the company's use of software to deliberately fudge EPA emissions testing is immaterial.

I sat next to him at an industry dinner in the Nineties, just after the fourth-generation Golf had debuted at the Frankfurt show. I told him, "I'd like to congratulate you on the new Golf. First of all, it's a nice-looking car, but God, those body fits!"

"Ah, you like those?"

"Yeah. I wish we could get close to that at Chrysler."

"I'll give you the recipe. I called all the body engineers, stamping people, manufacturing, and executives into my conference room. And I said, 'I am tired of all these lousy body fits. You have six weeks to achieve world-class body fits. I have all your names. If we do not have good body fits in six weeks, I will replace all of you. Thank you for your time today.' "

"That's how you did it?"

"Yes. And it worked."

It's what I call a reign of terror and a culture where performance was driven by fear and intimidation.

That's the way he ran everything. It's what I call a reign of terror and a culture where performance was driven by fear and intimidation. He just says, "You will sell diesels in the U.S., and you will not fail. Do it, or I'll find somebody who will." The guy was absolutely brutal.

I imagine that at some point, the VW engineering team said to Piëch, "We don't know how to pass the emissions test with the hardware we have." The reply, in that culture, most likely was, "You will pass! I demand it! Or I'll find someone who can do it!"

In these situations, your choice was immediate dismissal or find a way to pass the test and pay the consequences later. Human nature being what it is—if it's lose your job today for sure or lose your job maybe a year from now, we always pick maybe a year from now.

That management style gets short-term results, but it's a culture that's extremely dangerous. Look at dictators. Dictators invariably wind up destroying the very countries they thought their omniscience and omnipotence would make great. It's fast and it's efficient, but at huge risk.

Volkswagen

This diesel fiasco is immeasurable in terms of damages—so much worse than Toyota acceleration, Ford Firestone tires, or GM ignition switches. In all those cases, tragically, people died, but it wasn't premeditated. You settle with the victims' families, pay the fine, put in the new parts, and for $1.5 billion, it can all be contained. But this Volkswagen mess is like the disaster that keeps on giving.

To make the cars legal in the U.S., VW will need to program them with the software that passes the test, in which case, performance is down and fuel consumption is up, and every VW TDI owner is part of a class-action suit against Volkswagen. To retrofit a urea system is basically a nonstarter, as it would require far too much change.

There is no easy fix. But you can probably rely on the German government to do what is necessary to pull Volkswagen out of this crisis.

In terms of marketing cars in the U.S., Volkswagen will need a radically new array of products that are much closer to mainstream American tastes than what it has. The whole Clean Diesel campaign, as the foundation of the VW brand, cannot be resurrected. It's history.

SUBMIT QUESTIONS TO BOB AT: askbob@roadandtrack.com

Bob Lutz has been The Man at several car companies, so your problems are cake. Bring 'em on.

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