By on December 15, 2010

Remember the Schadenfreude when the Department of Justice shook down Daimler for $185 million for corruption allegedly perpetrated in U.S. jurisdictions such as Russia, China, Turkey, Egypt, Nigeria, Iraq, Turkmenistan, and a host of others? To add insult to  imbursements, Daimler even had to endure former FBI director and Lewinsky-sperm-on-blue-dress investigator Louis Freeh as anti-corruption compliance officer. In the bargain, the NYSE lost Daimler as a listing, because no NYSE listing, no more SEC probes. Everybody knows that these inducements are quite common in the industry. As evidenced by a massive raid involving around 100 police officers. They descended today on Ford’s German plants, on an unidentified company in Leverkusen and on the private homes of Ford employees.

This time, it was different: Not Ford did the greasing of palms. It was Ford employees who were greased. According to Die Welt, the corrupt colleagues all work in a department at Ford that organizes the changeover of production lines when new models go into production. Says Die Welt: “Their system was rather simple: The employees contracted companies, which reciprocated. For the system to compute, the jobs were invoiced at inflated prices, and approved by the managers. The money from the inflated invoices was divided between the involved companies and the employees.”

One Ford manager was immediately arrested. The public prosecutor alleges corruptibility, breach of trust, and fraud. This is not the first time. In summer, a similar ring was busted. The matter appears to be endemic at Ford.

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7 Comments on “The Republic Strikes Back: Ford Cologne Raided By Police, Managers Under Suspicion Of Corruption...”

  • avatar

    What does Ford Cologne smell like?  :-)

  • avatar

    For all of 5 seconds I sat here wondering how the Police could raid an engine. Then I felt stupid. Very stupid.

  • avatar

    I wonder if it is not cheaper for the end customer to let some bribery take place (undetected by the companies involved) , as compared to the alternative of building up and maintain an additional worldwide network of federal and NGO anti-bribery bureaucrats , issuing useless bribery ratings based on numbers drawn from their ass.
    Given the standards of today, I’d assume that Marco Polo or James Cook need to be reconsidered as criminals, as they always had some more or less official presents on board of their ships and made use of it.

  • avatar

    To err is human, that is why we have laws and regulations.
    At least this one didn’t cost us as much as the banking criminals.

  • avatar

    I guess Ford’s Deutsche division of corporate security lack the clout to do their own blitzkrieg?
    Get some new VPs from out of country in there – a bad fish stinks from the head down. A sour bidder must of blown the whistle.

  • avatar
    Telegraph Road

    Drawing a moral equivalence between Ford and Daimler doesn’t work here.  Daimler was charged with a crime.  Ford is not even a target of this investigation.

    Hopefully Ford will be able to recover the money stolen from it by these rogue employees. And hopefully Russia will be able to recover the money stolen from it by its own officials (with help from Daimler.)

    [Full disclosure: I work for a large OEM in Dearborn]

  • avatar

    I have worked in the industry all my life. In many parts of the world, greasing the palms is an absolute necessity. If you don’t do it, you are out of business. Want your industry be absolutely uncompetitive in the world market, then continue this crusade.
    In my book, giving money if required or demanded is not wrong. What is wrong is ASKING FOR MONEY. The crusade must be fought against the corruptibles, and especially against those who demand a donation, or you are out of the game.
    Quitely but effectively, China made great strides in that regard. It handed out harsh sentences to key figures who demanded and received bribes, and overnight, pretty much the only thing you can give to an official is a mooncake in October. That fact will take a while to register on the rankings of the NGOs. A lot in this world may be on the take, but the NGOs are a bit slow on the uptake.

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