I’ve seen corporations take a few hits in my time. Having worked in public and governmental affairs for Ford, GM and Fiat, I could hardly fail to be aware of the attacks made on large companies by people and organisations who fear their power and resent their behaviour — actual or suspected. I was reminded of my past thoughts and efforts in this field by a quasi-documentary called ‘The Corporation’ broadcast during the holiday period. Needless to say, it wasn’t praising the power supposedly wielded by corporate entities around the world.
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I subscribe to the idea that corporations and the technologies that they espouse are gradually increasing their influence across the globe in relation to the powers of governments. While governments struggle to adjust and implement their local, regional, national and trans-national responsibilities and authorities, corporations are relatively free to focus on achieving their business goals, aided and abetted by their creation of technologies that governments believe they can’t do without.
This theme was shrewdly foreshadowed a quarter-century ago by famed CBS News presenter Walter Cronkite. Cronkite, a car enthusiast with a racing record to prove it, warned of a coming collision between the products of technology and the needs of governments. On his retirement in 1981 Cronkite speculated on the difficulty of legislating ‘for a democracy with inputs from the population when the legislation is highly technical and scientific in nature. One group of scientists says one thing, another group contradicts the first.
‘These sorts of problems have become reality today,’ the respected newsman continued. ‘A hundred and fifty years ago you might have only face one such problem in a lifetime, like where to build a steam plant. Today it seems like ten a day. We have to concern ourselves with computer safety, auto emissions standards, auto safety, water pollution, the atmosphere, chemical additives in the food we eat, cures for all sorts of ailments, just name them. Our lives are built by the technological impacts on society, and here we are turning over so many of these decisions to government. I really think one of the great problems of our future will be how to keep democracy alive in a technological society.’
Expressed before the internet, Microsoft, GM crops and the exploitation of DNA, this was a prophetic view. Some of us in Britain are experiencing the tyranny of government and technology in harness with the erection of ugly wind farms in areas of natural beauty where the local populace is in complete opposition — democracy in retreat. The same applies to the proliferation of speed cameras throughout the UK, another government initiative riding piggy-back on technology. Underpinning both such actions and others like them are corporate initiatives that governments take up willy-nilly without knowing enough about them — a knowledge lacuna that companies are eager to exploit.
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By GlobalDataAt Ford in Europe our strategy was to work behind the scenes with civil servants and technologists in government, acting as an ‘impartial’ source of interpreted information about technologies affecting the auto industry. This was our best lobbying stance because, as a ‘foreign’ company, we didn’t have the national clout of the indigenous auto firms. Indeed, they wouldn’t even admit Ford and GM to some of their national and trans-national industry associations.
There wasn’t much we could do, however, about attacks on Ford from those who felt we were arch exploiters of humankind. A 68-page report of 1976 by Counter Information Services took as its theme that ‘The Ford Motor Company is in the business of making money out of car-workers. To do this it mounts a constant three-pronged attack: on wages, on productivity levels and on workers’ attempts to organise themselves.’ One of its main themes was that Ford whipsawed work forces in various companies to keep wages as low as possible. The report’s authors would be dismayed by the level of international sourcing of cars and components practised today by Ford and most other car makers in search of cost reduction in harness with quality improvement.
One of Europe’s more enlightened auto executives, Volvo’s Pehr G. Gyllenhammar, sought to give big companies a voice in 1982 by founding the Roundtable of European Industrialists. He put together a board of CEOs whose combined companies had turnover on the order of Spain’s GNP. ‘For all my adult life,’ said the Volvo chief, ‘industry has had a bad name in Europe. Now governments realise that they cannot do everything. We are wanted again and are asked to help solve problems.’
In addition to setting up a venture-capital company, Gyllenhammar and his partners backed studies on Europe’s transport needs and other issues. True to form they initially rejected membership by American firms, though this was relaxed later. Advocates would say that the Roundtable was an enlightened effort to raise business issues with governments; critics would call it yet another attempt to substitute the agenda of business for that of the public’s elected representatives. They could relax when, after Gyllenhammar was voted out of Volvo in 1993, his Roundtable quietly faded from view.
Needless to say, the TV programme on corporations didn’t overlook the 1984 disaster at a Union Carbide chemical plant in India that killed 3,000 and affected the lives of 570,000. Rightly enough it was excruciatingly difficult to allocate blame for the toxic-gas leakage between Union Carbide, 51 per cent owner of the Indian subsidiary, and the local staff — let alone the officials who allowed a shantytown to be built illegally close to the plant.
Commenting on the consequences of this tragedy at the time, a legal expert drew the lesson for multinationals that they should ‘control their safety arrangements and environmental impact strictly by their own inspectors on the spot.’ They were also advised to ‘abandon the project rather than succumb to the host government’s pressure to give up technical control of potentially dangerous plant.’ Here are important warnings for a new generation of managers for whom Bhopal is only a historical curiosity.
In the wake of Bhopal in 1985 multinationals were also warned not to ‘fool yourself that lawyers can prevent liability by cleverly drafted contracts or extricate the multinational corporation from a major accident. The cost of unlimited insurance cover for a disaster of Bhopal dimensions may be too high even for a major company.’ This was borne out by litigation over the Indian calamity that has rolled on well into the 21st Century.
The mention of lawyers brings me to the core of this column on corporations and their impact on society. As the aforementioned TV programmed rolled along, with its litany of corporate misbehaviour, I began to sense a common theme among its indictments. That is that the corporate structure, with its presumption of limited liability and its comfortable insulation from the cares of mere mortals, engenders a callous attitude on the part of its leaders and managers.
My dictionary defines callous as ‘unfeeling, insensitive’. I think that’s fair as applied to the attitudes of many people who find themselves in positions of corporate responsibility. How often have you heard someone say, ‘Well, I really regret this, but we have to do it for the sake of the company.’ That’s callousness. That’s the slippery slope down which moral men and women make immoral decisions.
In the 21st Century corporation we consider that our ability to act callously is enhanced by the protective walls we believe our lawyers have erected. We think we can shelter behind the legal defences they’ve constructed at such great cost. Recent court cases, however, and the post-Bhopal warning, remind us that some callous acts take us well beyond the limits that civilisation is willing to tolerate.
Corporations, say the experts, are treated like people under the law. It is up to the people in those companies to act with greater sensitivity to the consequences of their corporate actions in the 21st Century. Only if they do so will corporations begin to live down their well-deserved reputations for callousness.
– Karl Ludvigsen
Karl Ludvigsen is an award-winning author, historian and consultant who has worked in senior positions for GM, Fiat and Ford. In the 1980s and 1990s he ran the London-based motor-industry management consultancy, Ludvigsen Associates. He is currently an independent consultant and the author of more than three dozen books about cars and the motor industry, including Creating the Customer-Driven Car Company.
