The potential of conducting polymer coatings for corrosion protection is a topic of current controversy. In general, the efficacy of conducting polymers very much depends on how they are applied and on the conditions of the corrosion experiment, i.e. depending on the exact conditions a conducting polymer may have excellent protection capability or may lead to a disastrously enhanced corrosive attack. A number of possible protection mechanisms are proposed. The most interesting corrosion protection mechanism that is currently discussed for conducting polymer-based coatings is the intelligent release of inhibitor anions. However, in many cases this does not work in the presence of larger defects. Based on scanning Kelvin probe studies of artificial defect initiated reduction and delamination of polypyrrole films in nitrogen (reduction) or air (reduction and delamination) atmospheres it will be shown in this paper that this is due to a switching from mixed anion release and cation incorporation during reduction of the conducting polymer to an exclusive cation incorporation for reduction over extended length scales. Although only results for polypyrrole are discussed here, for fundamental reasons this is postulated to be of general validity for all conducting redox polymers such as polypyrrole, polyaniline, and polythiophene. Hence, all coatings based on pure conducting polymer layers or pigments with macroscopic percolation networks will fail in the presence of larger defects, even though they may show excellent corrosion protection for smaller ones.