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I spy with my beady eye ...

3 Aug 2010

Skulduggery in the auto industry

A short piece about competitors using industrial espionage to steal information about cars under development suggests that the practices are widespread.  The article specifically mentions:
  • Information obtained and disclosed through networks of moles, friends and acquaintances
  • Use of helicopters to spy on a rival's road tests
  • Intelligence functions within the organization
  • Social engineering
  • Hidden microphones & cameras
  • 'Clandestine visits to sensitive places'
  • Reverse engineering i.e. dismantling a new vehicle to find out how it is made
[That's a far from exhaustive list.  I wrote about others in our latest newsletter and awareness materials.]

I find it intriguing that stories of this nature have been circulating for years.  There's one on the go now about Chery and GM.  On the rather weak basis that there's no smoke without fire, there does seem to be a particular fascination with industrial espionage in the auto industry.  Why is that, I wonder?  Perhaps for some reason the people involved in the industry are more 'ethically challenged' than others (I find that rather hard to believe!).  Maybe the sheer industrial scale of automotive manufacturing makes it difficult to secure the plant and the people against this cloak-and-dagger stuff (true, but the auto industry is hardly unique in this regard).  Or is it just that the stories catch the fertile imagination of the motoring press, making a positive feedback loop that implies a general acceptance and widespread use of such underhand techniques?

High-stakes commercial competition between the main manufacturers is probably a contributing factor: it costs a large fortune to design and develop a new car design, and each manufacturer relies on a rather small range of models for their ongoing commercial success.  But again, the auto industry is hardly unique: many other industries and markets are just as intensely competitive, if not more so. 

I wonder whether national interests play a part?  Such massive industrial enterprises are undoubtedly strategically and economically important to the countries that have them, so it is conceivable that nation states might tacitly accept if not condone and support the use of industrial espionage.  The same would surely apply to the aerospace and defense industries, and others such as pharmaceuticals, finance, hi-tech, utilities ('critical national infrastructure') and more ... come to think of it, I've worked in all of those industries and can't recall any such incidents in the course of my career.  Either I have led a very sheltered professional life, or it has been going on right under my nose all these years ... or perhaps it is just not as common in practice as the news media would have us believe.

What do you think?  Comments welcome.

Regards, Gary

PS  Another, more legitimate way of obtaining valuable intellectual property is to buy foreign auto companies.

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