Volkswagen Emissions Cheating Case Report

...

RECOMMENDATION AND CONTINGENCY PLAN

i. WHAT SHOULD HAVE BEEN DONE

Volkswagen executives should have chosen to not manipulate the tests when this option was presented, and try to comply with the rules that are set in order to prevent environmental damage, even if they had to make a compromise in the engine’s performance. Manipulation was both illegal and unethical. What’s more, it put the company in a great risk in case this scandal was revealed (as it eventually did).

ii. WHAT CAN BE DONE TO MINIMIZE DAMAGE

a. What has been done so far?

Volkswagen announced plans to spend US$7.3 billion on rectifying the emissions issues, and planned to refit the affected vehicles as part of a recall campaign. The Volkswagen emissions scandal raised awareness over the higher levels of pollution being emitted by all vehicles built by a wide range of car makers, which under real world driving conditions are prone to exceed legal emission limits.

As part of its “Customer Goodwill Package,” Volkswagen is handing out $1000 cash to every owner of a VW TDI. Current owners of any VW model can get a $2000 cash rebate toward a new car. So far, 260,000 owners have taken advantage of the program. Atiyeh, C. (2016, March 3)

b. What should Volkswagen do now?

The company operated in direct violation of its values of social responsibility and sustainability and is being punished by the markets. Those repercussions, however, don’t compensate their customers or undo the environmental damage, and they don’t stop this fraudulent behavior from happening again. The consequences for deceiving the public should be severe.

First VW should fix the affected vehicles, bringing them into compliance with regulations.

Several things should be done to salvage the company’s credibility. First, VW should conduct a comprehensive investigation of the scandal in which the findings are confirmed by neutral experts. Share the findings with the public to recover trust and show transparency. Second, top executives should reset the corporate culture to promote transparency and communication.

Third, VW should institute an apology marketing campaign. The apology should contain their strategic plan to prevent a reoccurrence of a similar situation as well as a plan to help the environment recover from the damage, they should consider creating a charity organization that would help heart and lung disease affected.

These steps won’t erase the damage caused by the fraud, but taking these actions would help the company recover their reputation and financial future.

REFERENCES

- Barrett, S. R., & Speth, R. L. (2015, October 29). Impact of the Volkswagen emissions control defeat device on US public health. Retrieved March 1, 2016, from http://iopscience.iop.org/article/10.1088/1748-9326/10/11/114005/meta;jsessionid=3DC7C435AA8785645929DD85704419B7.c2.iopscience.cld.iop.org

- Anderson, B. (2016, January 5). U.S. Government Sues VW Over Emissions Scandal; $90 Billion In Fines Possible. Retrieved March 01, 2016, from http://www.carscoops.com/2016/01/us-government-sues-vw-over-emissions.html

- Atiyeh, C. (2016, March 3). Everything You Need to Know About the VW Diesel Emissions Scandal. Retrieved March 07, 2016, from http://blog.caranddriver.com/everything-you-need-to-know-about-the-vw-diesel-emissions-scandal/

- US Environmental Protection Agency website (www3.epa.gov/)

- Davenport, C. and Ewing, J. (2015, September 18). VW Is Said to Cheat on Diesel Emissions; U.S. to Order Big Recall. Retrieved March 1, 2016, from http://www.nytimes.com/2015/09/19/business/volkswagen-is-ordered-to-recall-nearly-500000-vehicles-over-emissions-software.html

- Ewing, J. (2015, December 10). VW Says Emissions Cheating Was Not a One-Time Error. Retrieved March 1, 2016, from http://www.nytimes.com/2015/12/11/business/international/vw-emissions-scandal.html

- Hakim, D. and Ewing, J. (2015, December 21). VW Executive Had a Pivotal Role as Car Maker Struggled With Emissions. Retrieved March 1, 2016, from http://www.nytimes.com/2015/12/22/business/international/vw-executive-had-a-pivotal-role-as-car-maker-struggled-with-emissions.html

- California Air Resources Board. Low-Emission Vehicle (LEV II) Program (as of February 2007). Retrieved March 3, 2016, from http://www.arb.ca.gov/msprog/levprog/levii/levii.htm