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Dieselgate scandal: cozy ties on show

Kay-Alexander Scholz
August 2, 2017

Even in the quiet summer months, Dieselgate and whispers of industry collusion loom large. Critics say Berlin should end its close friendship with carmakers. Both sides are currently holding a much-anticipated summit.

gas pumps
Image: picture-alliance/dpa/F. May

Germany's automobile production is vital for its economy. "We need a strong and innovative auto industry, but also an honest one," said Ulrike Demmer, the German government's deputy spokesperson. 

"Criticism for what deserves criticism," she said. "But always with the knowledge that this is a strategically important industry for Germany."

Read more: The political tug-of-war over diesel

Demmer declined to elaborate on what "strategically important" means. In numbers, it is 800,000 jobs directly created by the automobile sector and as many as another 500,000 indirectly. German cars account for one-fifth of the country's exports.

Banks were called "too big to fail" during the financial crisis. It is fair to apply the same term to Volkswagen, Mercedes and BMW. Without its car manufacturing, Germany's economic might would be done for.

Key positions for lobbyists

A back and forth between politics and the car industry has been the norm for decades. Angela Merkel's Minister of State, Eckart von Klaeden, is now chief lobbyist for Daimler – as was Martin Jäger, a former spokesperson for the Federal Foreign Office who is now at the Interior Ministry for the state of Baden-Württemberg. Thomas Steg, a former government spokesperson, holds that job title for VW. Matthias Wissmann was a member of parliament for more than 30 years before becoming president of the German Automobile Industry Association, a position he has held for a decade.

Read more: Massive collusion amongst German automakers

The German state of Lower Saxony has a 20 percent stake in Volkswagen. Long before he became foreign minister, Sigmar Gabriel was the state premier of Lower Saxony. That put him on Volkswagen's supervisory board from 1999-2003, a post now filled by the current state premier, Stephan Weil. Information like this is available at lobbyfacts.eu.

"The fact is,the state was far too close to the car industry in the past," said Environment Minister Barbara Hendricks.

Infografik Das Geflecht von Politik und Autoindustrie ENG

Money and more money

The interconnection between politics and industry is not only through people, but also money. The automobile industry is a major donor to all political parties: In April, Daimler sent 100,000 euros ($118,174) to both the CDU and SPD – for years, a common sum. Stefan Quandt and Susanne Klatten, principal shareholders of BMW, each donated 50,000 euros ($59,000) to the CDU and FDP. The Greens' Winfried Kretschmann, state premier of Baden-Württemberg, a German car center, came into 110,000 euros ($130,000) from Südwestmetall in 2016.

Read more: The trouble with diesel bans

Lobbyists "drop lawmakers hints as to the auto industry's interests, and they often listen and gladly help," a report by Greenpeace stated last year. "The sector influences policy framework to ensure business flourishes with high performance cars."

Economy versus ecology

Germany's auto industry, and in particular, VW, the world's largest carmaker, earn a lot of money with high performance cars, especially overseas. The domestic and EU markets are just a part of total earnings. China and India are major markets, home to hundreds of millions of potential first-time drivers.

Read more: Volkswagen faces new California fine over 'Dieselgate'

Low-emissions vehicles have met a mixed response. VW's three-liter car at the turn of the new millennium had tepid sales. Germany is far from its goal of putting one million electric cars on the streets by 2020. They remain expensive and their batteries provide limited range. Amid the diesel scandal last summer, a billion-euro government incentive program for electric cars failed to see a major return on investment.

Good lobby, bad lobby

"The concluding report of the Bundestag's emissions inquiry again proves that the federal government puts corporate interests above environmental and consumer protection," Christina Deckwirth wrote in June for the NGO, Lobbycontrol. "Ultimately, the government let an expert with ties to the industry sugarcoat the diesel scandal."

Intrigues in the auto industry