Audi 2008 Annual Report Download - page 123

e are engulfed in a financial crisis and are
bombarded daily with alarming reports
about how bad things could still get. So it’s
high time to call on the experts for an assessment of
the situation. Professor Max Otte saw the collapse coming.
When you wrote “The crash is coming” two years ago,
what were the warning signs?
Max Otte: Well, my basic observation was that a nation’s
economy, just like a business, becomes overleveraged if it
takes on too much debt. And we had reached a point where
total U.S. debt was almost 400 percent of its gross domes-
tic product. Such a house of cards is eventually going to
come tumbling down. If the financial sector gets to be too
big, the real economy can no longer sustain it.
For many years, the drastic expansion of the global eco-
nomy and the resulting rise in demand cushioned the
growing amount of debt. So what prompted the bubble
to burst?
Otte: I would dispute the claim that there was ever a
strong growth in demand. It is often said that U.S. con-
sumers are the driving force of global capitalism. The U.S.
economy absorbed a great many surpluses; after all, in
recent times it has been soaking up two-thirds of global
savings. There was such an accumulation of debt-financed
potential hazards that it was ultimately impossible to say
what really prompted the collapse. But the behavior of
central banks certainly played a part. By flooding the mar-
kets with cheap money, they ultimately left us with no risk
premium to help us differentiate between risky and less
risky credit. Once the first risky loans fall due or turn toxic,
there is no way to stop it.
Mr. Strotbek, as AUDI AG’s CFO, have you ever experienced
a particular moment where you thought: We’re about to
be hit by a crisis?
Axel Strotbek: Well, Europe had long been suspicious and
critical of the United States’ over-indebtedness and access
to cheap money. But there’s no doubt most of us here were
taken aback by the severity and speed of the crash. I think
we’re a long way away from having fully digested the situa-
tion – in fact, we’re only just beginning to do so. There is
still a lack of transparency and perception of how the rules
of the game have changed.
When you consider that many companies are looking a lot
shakier than the Audi Group, might you even be one of the
winners of this crisis?
Strotbek: Thanks to our youthful, attractive model range,
we succeeded in posting outstanding results in 2008. But we
have always tried to stress that we don’t exist in some is-
land paradise. And with the overall markets slumping in some
cases by more than 25 percent, we are bound to be drawn
Interview Olaf Wittrock
Photo Dieter Mayr
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Opportunities in crisis
Audi CFO Axel Strotbek met with Max Otte, the economist who predicted the
global crash back in 2006 and who now hopes for clear and better regulations
on global economic activities. Something everyone would profit from.