WINDING DOWN
An idiosyncratic look at, and comment on, the week's net, technology and science news
by Alan Lenton
Another week, another issue of Winding Down... So this week we look at the car industry with a jaundiced eye, VW and Chrysler at the moment, and a prediction of more to come, Samsung’s involvement with horses, NASA and space infrastructure, 243 free technical eBooks, and a look at HGC 891 galaxy. You want more? OK, try the scanner section where you will find URLs pointing you to material on Android privacy, vehicle-to-vehicle communication, Google security design, artificial spider silk, a 9,000 year old flute, 3D graphene, and global living conditions.
OK – let’s go!
Analysis: The state of the car industry
US$4.3 billion. That’s the fines being levied against Volkswagen for deliberately and fraudulently fixing the emissions tests on its diesel cars. And as a bonus VW are also throwing six minions to the wolves to face individual charges of fraud. Sounds like a lot of money, doesn’t it. Consider this, though: VW’s operating profit for the first half of 2016 was just under US$8 billion (7.5 billion euros), so you are probably talking about an annual profit of around twice that – say US$15 billion. Looked at that way a fine of 4.3/15 = 28.66666% (28.6 recurring, according to my trusty Samsung Note 1 phone) doesn’t seem that large.
But wait – the first car ‘fixed’ to defraud was the 2009 VW Jetta, so maybe we should be looking at the profits from 2009 – when it started – through to 2016 – when it they were caught at it. Well, between 2009 and 2015 they racked up operating profits US$73.39 billion (68.95 billion euros*). Adding in our projected 2016 figure of US$15 billion we get an operating profit for the whole period of US$88.39 billion. So, if we now apply the fine over the whole period we get 4.3 /88.39 = 4.8648%. Say 5% to make life easy.
Not exactly a big hit. In fact for a global company like Volkswagen, it’s not much more than pocket change – a rap across the knuckles.
And what about the individuals being prosecuted? Small fry – upper middle management at the most. The really big guys get off scot free. Nobody I know believes that top management didn’t know – or that the whole thing was cooked up by rogue programmers.
http://www.theregister.co.uk/2017/01/11/vw_pleads_guilty_pays_43bn/
But, dear reader, this is only the tip of the iceberg. On the very day that the VW fine was announced, the US Environmental Protection Agency (EPA) announced that it believed that Fiat Chrysler employed the same trick on 100,000 of its diesel vehicles between 2014 and 2016! Even now Chrysler isn’t coming clean – it’s twisting and turning and failing to provide the information the EPA wants, and the EPA have run out of patience and issued a notice of violation.
https://consumerist.com/2017/01/12/fiat-chrysler-accused-of-using-potential-defeat-devices-in-more-than-100000-trucks-suvs/
Personally, I believe that these aren’t isolated instances. It’s notoriously difficult to get small diesel engines to meet the emissions standards set by developed countries. This combined with sloppy testing regimes and even, on occasion, self-certification (especially in Europe) has had the effect of developing a culture in the big car manufacturers where this sort of illegal behaviour is not only acceptable but the norm. What does it matter if there if a few percent of profits have to be paid in fines, and a few of the lesser managers get jailed for doing what they were told, as long as the bonuses roll in?
Mark my word this scandal will not stop at Chrysler. There’s more to come!
[* I got these figures from the .pdf versions of VW’s annual reports, which are available on the VW group web site. They break down as follows: 2009: 1.85; 2010: 7.14; 2011: 11.27; 2012: 11.51; 2013: 11.67; 2014: 12.69; 2015: 12.82. All the income figures are in billions of euros. I used Google’s currency converter to generate the dollar figures at the current exchange rate. This means the figures are more favourable to VW than they probably should be, since for most of the time in the period under discussion exchange rates were more favourable to the euro...]
Shorts:
I don’t normally cover heavy duty politics, but as I have a Samsung phone, the headline “Tell us about that $1m horse, Mr Samsung” in The Register’s business section looked intriguing. Nothing to do with fixing noxious emissions from horses, it turned out. It seems that the Korean President is under investigation and is currently suspended while the lawmakers consider impeachment. All the tech giants have given large donations to the president and her family, but Samsung are the biggest donors, and investigators are taking an interest.
The horse was a ‘gift’ to the daughter of the president, a daughter who is an internationally known equestrian. These sort of things seem to happen quite regularly in Korea, it seems. Samsung have quite a record. In 2008 the then chairman of Samsung, who happens, by some strange coincidence, to be the father of the current chairman, was convicted of embezzlement, tax evasion, and bribing an earlier president in 1996. He was given a suspended sentence. And then – get this – he was pardoned by the president!
It was perhaps unfortunate that I was reading this story first thing in the morning while drinking my wake-up cup of coffee, because when I got to that last bit I snurffed half the coffee over my keyboard! Fortunately, the keyboard is, with a little care, washable...
http://www.theregister.co.uk/2017/01/11/samsung_bribery_investigation/
Homework:
Space infrastructure is much in the news in the putative space faring community at the moment. The question is what NASA should be doing now that commercial spacecraft are firmly established. (I originally wrote ‘The use of commercial spacecraft is exploding’, but after some thought that seemed, how shall I put it, inappropriate...) There is a consensus that we need a ‘space infrastructure’ – refuelling stations, power plants, habitats, etc. in Earth orbit. One suggestion is that it should be NASA that builds this instead of trying at great cost, to compete with commercial rockets.
That’s an interesting idea, but an even better (to my mind) argument is presented in the Space Review that we should look to a new federal government corporation to set up the infrastructure. There are two reasons. The first is that the space infrastructure is needed to turn space into a commercial proposition. The problem with this is that initially setting up the infrastructure won’t be commercially profitable. The idea is that in the same way the early federal government opened up the interior of the American continent in the early 1800s by building roads, the current federal government should ‘open up’ space by building the infrastructure.
The proposers of this argument also agree that NASA should stop trying to develop and build rockets, but they feel that NASA isn’t a suitable body to build the infrastructure. They see NASA moving to become the body that does space based research, a far more appropriate role in my view.
Well this isn’t going to be resolved in a hurry, but it’s good that the issue is on the table and being actively discussed!
https://blogs.scientificamerican.com/guest-blog/nasa-should-build-a-superhighway-in-space/
http://www.thespacereview.com/article/3142/1
Geek Stuff:
Well, that’s interesting! O’Reilly are offering 243 free eBooks on design, data analysis, software, web development, AI and business – among other things. All I can suggest here is that you mosey along to the web site and take a look for yourself.
http://www.oreilly.com/free/reports.html
Pictures:
This week’s picture is a really nice shot of the galaxy HGC 891, which is edge on to us. There are plenty of pictures of spiral galaxies showing their spirals and centres, but not so many edge on like this one.
https://apod.nasa.gov/apod/ap170112.html
Scanner:
How to set up your Android phone for ultimate privacy
http://www.infoworld.com/article/3157778/android/how-to-set-up-your-android-phone-for-ultimate-privacy.html
New US rules on ‘vehicle-to-vehicle’ communications under consultation
http://www.theregister.co.uk/2016/12/16/new_us_rules_on_vehicletovehicle_
communications_under_consultation/
Google infrastructure security design overview
https://cloud.google.com/security/security-design/
Scientists perfect creation of artificial spider silk
http://www.33rdsquare.com/2017/01/scientists-perfect-creation-of.html
Hear a 9,000 year old flute
http://www.openculture.com/2017/01/hear-a-9000-year-old-flute-the-worlds-oldest-playable-instrument-get-played-again.html
New 3D graphene is ten times as strong as steel
http://newatlas.com/3d-graphene/47304/
A history of global living conditions in 5 charts
https://ourworldindata.org/a-history-of-global-living-conditions-in-5-charts/
Acknowledgements
Thanks to readers Barb and Fi for drawing my attention to material for Winding Down.
Please send suggestions for stories to alan@ibgames.com and include the words Winding Down in the subject line, unless you want your deathless prose gobbled up by my voracious Thunderbird spam filter...
Alan Lenton
alan@ibgames.com
15 January 2017
Alan Lenton is an on-line games designer, programmer and sociologist, the order of which depends on what he is currently working on! His web site is at http://www.ibgames.net/alan/index.html.
Past issues of Winding Down can be found at http://www.ibgames.net/alan/winding/index.html.
