[bediger4000]

Incompetent, autocratic managers (as you describe) will sooner or later cause huge problems. You're already seeing the problems start in the declining team satisfaction ratings. Sooner or later, major problems can happen. Unfortunately, the decline can take years. My advice is to care. Since you (and apparently others) have gone around the manager to the director without any resolution, it's time to start looking for a new job. Assuming you're in the US, your employer owes you next to no loyalty, and uses your emotional attachment to the job or the product to bind you to the situation. Rewrite your resume and quietly start looking.