Volkswagen is No.7 on the Fortune Global 500 list

The car is the thing on the road that takes you back to your abode

The annual Fortune Global 500 and Fortune 500 lists dropped yesterday, and they’re interesting lists, as far as lists go. 

With all the ink spilled over Facebook, Apple, Amazon, Netflix, Google and Microsoft (well, maybe not as much MSFT as I’d like outside of the whole TikTok thing), the only one of these tech giants to crack the global top 10: Amazon. 

The list should be an important reminder that a) it’s a big world out there, and b) that the world is still fueled by power companies. Six of the top 10 Fortune Global 500 companies are gas/electric companies.

(Image via Fortune)

But also notice how VW is at No. 7. For a company that, just 4 years ago settled a $15 billion lawsuit with multiple U.S. state and federal agencies for lying about auto emissions, it’s a remarkable feat. 

AutoWeek writes that

The automaker ended up allocating over $20 billion to buybacks of hundreds of thousands of cars that had been sold in the U.S., in addition to paying fines and taking on other remedial projects. Following the 2016 civil settlement the German automaker had also settled with the Department of Justice in the U.S. in regards to criminal misconduct, paying another $2.8 billion in the process. Volkswagen has also faced separate criminal and civil litigation and government probes in a number of other countries, including Canada and Germany, and the diesel investigation eventually included other Volkswagen Automotive Group brands including Porsche and Audi, the offices of which had been raided by German prosecutors. By 2017 the probes has largely quieted down, even as German prosecutors continued to interview individual executives.

Think about how much money VW makes that it can weather a $20 billion hit and still be a top 10 Fortune 500 company. One could argue that the amount of public relations and advertising campaigns have helped with the company’s image.

Here’s VW’s 2019 “Rebirth” spot, which tried to address and reframe the company:

But all the slurpy press of the ads can’t fight the company’s ongoing legal issues. AutoWeek goes on to explain how a unanimous 3-0 ruling from the U.S. Court of Appeals for the Ninth Circuit in June over individual county lawsuits (specifically Florida's Hillsborough County and Utah's Salt Lake County) has ramifications not just for VW, but for all auto manufacturers

the settlements reached by Volkswagen with federal agencies did not prevent suits by local governments aimed at post-sale modifications of the so-called defeat devices, in contrast to sales of new cars. The court cited the Clean Air Act in making a very narrow distinction: While the Clean Air Act preempts local counties' claims in regards to defeat devices in new vehicles, leaving that up to federal agencies, it does not preempt their claims in regards to post-sale updates to their emissions software.

In other words, 

How much could Volkswagen be fined by the Utah county?

$5,000 per violation per day, which multiplied by the number of vehicles involved and the number of days that had passed, could easily amount to $10 billion per year. That's the amount that the automaker could be fined by just one Utah county.

But as long as VW makes commercials that the press gleefully eats up, does it even matter?

Apparently not, as the company in May pulled a series of ads that were deemed racist.

The BBC reported VW’s statement:

We fully understand the disgust and anger in response to the video. It is quite clear that this video is wrong and distasteful. We firmly distance ourselves from the video and apologise sincerely."

It said that given its own history - the firm was set up by the Nazis prior to World War Two - "Volkswagen has positioned itself as a company that does not tolerate any form of racism, xenophobia or discrimination."

In a just world, a company that takes such a financial hit because it lied to regulators shouldn’t be rewarded with Fortune 500 status, let alone continue to sell cars. 

But this is the world we live in, where the most valuable companies are either controlled by a communist state (Nos. 2-4 are Chinese state-controlled power companies, that, in itself, is pretty rich!) or have created calamities that have destroyed the environment (BP, No. 8) or have covered up recalls from cars that killed people (Toyota, No. 10) or had an international bribery scandal (Walmart, No 1.) or have become so powerful that we as a society can’t function without its services (Amazon, No. 9). 

(The Fortune 500 list, which focuses solely on the U.S., tells an equally interesting story; instead of power companies leading the way, it’s a mix of pharma, tech, gas, and Berkshire Hathaway.)

And, yes, many of the companies on the Fortune Global 500 list have positive sides giving money to certain causes, leading in efforts, large and small, to help close different societal gaps. Volkswagen America even has a philanthropic arm, while VW corporate has a sustainability arm.  

Capitalism is replete with idiosyncrasies that most likely make us question our most deeply held beliefs. If we actually stopped and tried to square the values we say we live by versus the realities of how live day-to-day, our heads would explode. We couldn’t handle all the contradictions.

Or perhaps more accurately, compromise begets compromise and all we’re trying to do is make it to the end of the day. We say ‘We know X Company is bad, but we’ll continue to use it’ because it makes our lives that much easier.

As we talked about in June, when companies were quick to hop on the Black Lives Matter bandwagon before actually taking a look at their own systemic racial issues, companies understand that, in the end, the only thing that matters is the dollar. 

Or maybe, if we’re looking at the Fortune Global 500 list, if not the near future, it’s the Yuan.

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Weezer, “Everybody wants to rule the world”

Some interesting links:

• A New Policy for News Publishers Connected to Political Entities (Facebook)

• How Experts Are Attempting to Combat Artificial Intelligence’s Racist Tendencies (Adweek)

• Apple’s move to bolster news app draws criticism (Ad Age)

• Building a digital New York Times: An interview with outgoing CEO Mark Thompson (McKinsey)

• Kroger to build web marketplace to compete with Amazon, Walmart (Bloomberg)

• Disney, Viacom, Others Will Limit Data Collection To Settle Children's Privacy Battle (MediaPost)

• QAnon groups have millions of members on Facebook, documents show (NBC News)

• Disinformation for profit: How a Florida ‘dealmaker’ turns conservative outrage into cash (Washington Post)