Published in Business Spectator (Melbourne), 1 October 2015
The Volkswagen emissions cheating affair is only the last in a long row of German corporate scandals, as I wrote last week (The fallout from the Volkswagen fiasco, 24 September). But it is not just a corporate scandal we are witnessing, what is on display is also a piece of crony (or at least cosy) capitalism. For too long German carmakers have been worryingly close to politicians that are supposed to regulate them.
In a way it is unsurprising that German car makers wield enormous influence. Last year, the automotive industry in Germany had a combined turnover of €367.9 billion, just shy of 13 percent of the country’s GDP and employed 774,900 workers. Without any exaggeration car manufacturing is Germany’s most important industry.
This elevated position within the Germany economy makes car manufacturers a political force too. No German government…
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