Lutz places blame for VW scandal squarely on Piech

November 09, 2015 12:00 AM

Lutz: There was a “reign of terror” at VW.

Bob Lutz figures he knows what's behind the diesel test-rigging scandal at Volkswagen. He says it's the cutthroat culture at VW created by ex-Chairman Ferdinand Piech.

In Lutz's column in Road & Track last week, the former General Motors product czar wrote that Piech "is more than likely the root cause."

"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."

Lutz made similar comments about Piech during a live interview last week on CNBC.

Lutz and Piech go way back -- as competitors. They went head-to-head in Europe while Lutz was at Opel, BMW and Ford of Europe in the 1960s, 1970s and 1980s. When Lutz was a top exec at Chrysler in the 1990s, he sat next to Piech at an industry dinner. The fourth-generation Golf had just debuted.

"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."

Piech: Threats got results.

Lutz writes: "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."

Lutz reckoned that VW engineers at one point said to Piech, "We don't know how to pass the emissions test with the hardware we have," and were told "You will pass! I demand it!"

"In these situations, your choice was immediate dismissal or find a way to pass the test and pay the consequences later," Lutz wrote. "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."