VW: Or how not to lobby as a CEO

What a lobbying nightmare. The new chief executive of Volkswagen, Matthias Müller, met with a senior government official in the United States recently to discuss the crisis that hit the European carmaker on “diesel gate.”

Everyone expected a professional corporate lobbying action from a world market leader like VW. A high end, politically sophisticated attempt to appease the U.S. authorities, government and customers. A kowtow, a mea culpa, combined with the promise to fix things fast and behave properly in the future. What followed was a disaster. Müller, who met with Gina McCarthy of the Environmental Protection Agency, probably delivered one of the most embarrassing lobbying actions seen in DC for ages. The question everyone asks now is “Why?”

{mosads}Here is what happened. The EPA is investigating how VW had installed software aimed at cheating on emission tests of about 600,000 diesel cars sold in the U.S. In an interview in Detroit before the meeting in Washington, Müller, when asked whether the company had lied to regulators, described the issue as a technical problem, not an ethical one. This goes in line with a recent statement on German TV where he explained that VW technicians had tried to meet internal benchmarks through their own means and obviously failed to do so. The EPA was not amused.

It is already a good question how one can expect any authority in this world to believe that corporate structures of big enterprises really work this way. Experience shows that in such structures a respective inappropriate business activity often enough is either orchestrated or at least tolerated by management.

Come on, seriously. Who down there on the working level would risk his job saying “I have a brilliant idea. While I don’t own the company and I don’t benefit financially from this, I will just build in this new creative device and tell nobody about it.”?

A probable corporate scenario rather goes along the lines of management telling technicians: “Look, there are new pollution benchmarks we have to meet. Get it done. Without too much of a cost. I don’t care about details.” And the technicians say: “You want it. You get it. Here you go.”

But now the VW CEO is blaming his technicians instead of taking CEO responsibility for what happened. Even though he wasn’t CEO at the time it happened, so people wouldn’t even blame him personally. Lobbyists in DC are shaking their heads. It is not what Americans want to hear. And it’s not how you behave in DC.

But then think again of how the CEO of the U.S. corporation General Electric, Jack Welch, lobbied the European Commission on the intended Honeywell merger. He flew into Brussels himself, literally kicked in the door of the responsible EU Commissioner Mario Monti – and wondered after he got home, why his merger was not cleared by the EU. And today U.S. corporations Google, Uber and friends don’t do much better in Brussels either.

So the same problem exists in both transatlantic directions. Why is that so? Well, while some CEOs might have a gut feeling on their home turf how to properly approach politicians, administrations and legislators, they mostly fail when they leave their turf. They know the local politicians in the constituency where their company is based. They know how to handle them and get what they want. And then they try to apply the same model to every scale.

But for an American it makes a huge difference when he moves his lobbying from community level to state level to federal level. Let alone to Brussels. And the same goes for German CEOs going to Berlin, worse Brussels – let alone DC.

As a corporation, flying in your CEO to lobby foreign administrations in a hit and run mission is not just useless. It is mostly counterproductive. You are serious about lobbying as a company? Then do it properly. Step up your in-house capacity quality wise, not quantity wise. And get the best hired guns in the market to assist you.

A CEO who acts as his company’s part time lobbyist just because he thinks politics is fancy doesn’t do a favor to its board and stakeholders.

Geiger is managing partner of Alber & Geiger, a political lobbying and European government relations law firm based in Brussels.