As we’ve seen with VW’s recent scandal, when the public finds out about how badly a corporation screwed up, somebody has to take the blame. Unfortunately for the high-up executives and decision makers, that usually means them. These are the ten biggest automotive scandals that have caused an executive to find the door.
Dany Bahar was famously known as the lightweight, small British sports car company CEO who couldn’t care less about weight or size for sports cars. Lotus claimed he was fired for his complete disregard of company funds. But was he?
Toyota’s highest ranking woman executive resigned after being arrested in Japan. Police claimed that she had collected a package containing oxycodone pills hidden in toy necklaces. Not really a smart move in a country with some of the most savage drug laws on the planet.
It all started when Mother Jones leaked that Ford knowingly produced and sold Pintos that were in danger of exploding upon a rear-end impact, and that Ford was also completely aware of a possible fix, and that Ford figured it would be cheaper just to deal with any possible medical costs that might incur instead.
After that report came out, someone had to take the fall. It was estimated that at least 27 (though some claimed between 500 and 900) people died from their greedy carelessness. A month after Ford was forced to recall over 1.5 million cars, President Lee Iacocca was fired from his position at Ford.
Decades later, a Rutgers Law Journal report vindicated the Pinto, finding it no more dangerous than other contemporary cars, even with regards to fires.
In July 2012, GM fired its chief marketing officer Joel Ewanick after he pushed for a $600 million deal to become the official automotive sponsor of the Manchester United soccer team. Oh, and in addition to the $600 millions, Man U also required an additional $100 million “activation fee”, which was probably to cover their own $100 million worth of debt they had incurred at the time.
After over 30 years working for Ford, Nasser’s career came to an abrupt end following the whole ‘Exploder’ Firestone tire disintegration controversy. You know, the whole Ford Explorer tire-explosion mess? Eventually it came to light that over 100 people died and that Ford knew about the issue before it was forced to do anything about it. Nasser resigned from the company in October 2001.
During a period when Australian profits were low, two Fiat Chrysler Auto executives in Australia were accused of blowing millions of company dollars on basically whatever they wanted. Check out this list of payouts that our Patrick George put together when we got word of this lawsuit.
Here’s the highlight reel of the accusations made against the party-mad Aussies:
- Christmas parties at Crown Casino that cost $1 million a year
- About $800,000 for a Fiat Abarth racing team with Campbell and another executive as drivers
- Free cars for Fiat Chrysler “brand ambassadors” in the UK like Elizabeth Hurley, despite Fiat Chrysler having no brand ambassador program there
- Authorizing $550,000 for a “mobile outdoor floating billboard” that turned out to be a sweet $400,000 40-foot yacht — and was purchased by a company co-owned by Campbell’s wife
- A free car for Campbell’s wife’s hairdresser
- Campbell ordered other employees to submit expenses for travel fees he himself incurred
- $6.6 million to a company called Digital Dialogue Media toward “corporate website services” for Fiat Chrysler Australia, even though the company was part-owned by FCA marketing director Sam Tabart
- A $145,000 annual lease on a property that just so happened to be owned by Campbell and his wife
- “More than $30 million of contracts signed with companies allegedly related to either Campbell, his wife, former business partners or other senior executives with the company”
- Payments of more than $4 million to a company owned by Campbell’s friend and ex-boss during the Daimler-Chrysler era, Ernst Lieb. Lieb was fired by Mercedes-Benz for using corporate funds to upgrade his house
The list goes on and on! What a bunch of kooks, those Australians!
Ah Bob Nardelli, you might remember him as the ex-Home Depot CEO that led an already downhill Chrysler even further into a financial nosedive during the 2008 Recession. Chrysler was offered government loans, and Nardelli allegedly rejected them because they would’ve forced a paycheck cutback on his end. Nardelli instead went for more expensive loans from private firms. He left the company after Chrysler filed for Chapter 11 bankruptcy in 2009. Good riddance.
After spending years at GM and nearly completely overhauling how the company spent money on buying parts and production costs for new cars, Jose Ignacio Lopez de Arriortua left The General in 1993 for a similar position at VW. This probably would’ve been all well and good if Lopez didn’t reject a promotion offer from GM so aggressively, and if he didn’t give trade secrets and tons of other private insider GM information to Volkswagen.
In late 1996 Lopez resigned from his position at VW, but his trouble didn’t stop there. To cover for his wrongdoings, VW was forced to pay GM $100 million in cash and continue to buy at least $1 billion in auto parts. Not to mention Lopez himself was on the line for $230,000 in civil fines.
Through trial and error, Preston Tucker attempted to build Tucker Automobiles from the ground up. Though the company received a lot of support from the general public, many possible rivals and government officials were not fans of the new brand, and gave the Tucker and his company as much trouble as possible.
Between struggling to create a fully-working prototype, poor public relations strategies and overall inexperienced leadership, some might argue the project was doomed from the start.
John Z. worked with GM for 17 years and had his hands in many cars that shaped the American car industry. He then went on to design his own world-famous car, the DeLorean DMC-12.
It all came to an end when DeLorean was arrested (but later acquitted) of multiple cocaine related drug charges. Even though the drug-related charges were dropped, DeLorean was later forced to pay out millions of dollars for law and credit fees that he had amassed thanks to multiple fraud charges. He filed for bankruptcy in 1999.
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Top Photo Credit: Delorean Motor Company via Edmunds