Written by: Carlos Vega-Garcia, AAE of Valley Cafe
“SCHLUSS MIT LÜEN!” “NO MORE LIES.” Is exactly what people around the world are urging Volkswagen to do. Stop telling lies!
On Friday September 18, The U.S Environmental Protection Agency publically accused Volkswagen of rigging emissions test in Europe and in the U.S. At first, Volkswagen declined to comment on the accusations. A couple days later former CEO of Volkswagen Martin Winterkorn issued a statement admitting they have been dishonest about their operations. As facts of the companies “dishonesty” came to light, Volkswagen quickly found themselves in a PR crisis.
Volkswagen got caught installing approximately 11 million diesel vehicles worldwide with software made to deceive nitrogen oxide emissions test. This software made diesel vehicles appear to be clean and up to standards, but in reality these diesel cars were producing up to 40 times the allowed nitrogen oxide levels. As a result, the company will have to recall about 500,000 cars in the U.S and 8.5 million in Europe throughout 2015 and 2016. Talk about shattering your brand reputation and credibility.
“I am shocked by the events of the past few days. Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group,” – Volkswagen CEO Martin Winterkorn
There is no denying that what Volkswagen did was straight wrong. They lied to the world and consumers crushing their brand reputation and credibility to pieces. As a result of this crisis;
- Volkswagen is facing up to 18 billion dollars in fines.
- Stock shares for Volkswagen dropped about 50% since the crisis.
- CEO Marin Winterkorn resigned.
- Volkswagen could face civil lawsuits from customers.
- Volkswagen has to recall 500,000 cars in the U.S and 8.5 million in Europe.
- Volkswagen’s brand reputation and credibility have taken a major blow.
- Companies that buy passenger cars from Volkswagen like Audi and Porsche had cars affected as well.
“I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.” – Volkswagen CEO Martin Winterkorn
Volkswagen’s move to initially deny to comment on the accusations raised a red flag. Did they know they got caught and were internally executing a crisis communication plan? Or, did the CEO and corporate not have any knowledge of what was going on? Winterkorn claims he was unaware of what was going on. With something as big as this, I doubt ownership had no idea what was happening.
Taking so long to respond allowed the situation to get out of control. Volkswagen had every single media outlet talking about them negatively. Fueling the rumors and information that were out there because no one had heard from Volkswagen themselves.
At least the company as a whole and the CEO of Volkswagen U.S.A Michael Horn took the accusations head on, admitted they cheated, and issued an apology. Admitting is definitely a great first step, but did the company do enough in their response? Some experts argue that the company didn’t do enough online.
“The last story on its corporate newsroom was ironically about sustainability. The only mention is a news release on its investor relations website that it looks like it has legally had to issue. Likewise its @VWUKNews makes no mention of it. These are channels it should have been utilising.” – Stuart Bruce, Independent Public Relations Advisor and CIPR Council member
Even Volkswagen’s crisis communication response was effective, will it ever be enough to repair their image? They are now offering owners of the “cheat car” $1000 in gift cards and dealership credits. I’m sorry Volkswagen but I don’t think giving your customers $1000 is going to repair your brand image.
People tend to forget things but not something like this. Even if this crisis isn’t being talked about down the road, people will always associate Volkswagen with the words “cheaters” and “liars.” Not to mention, they are now Public Enemy No. 1 in the environmentalist community.
Das Auto, more like Das Liars.