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Building Strengthening & Defending reputations
Building Strengthening & Defending reputations

Volkswagen’s Scandal Demands Transparency, Quickly

Dieselgate shows no signs of abating.

The emissions scandal that has staggered Volkswagen, the German auto giant with a previously sterling reputation for manufacturing eco-friendly cars designed to the highest standards, continues to make headlines around the world.

What a week it’s been for the venerable 78-year-old company, Europe’s largest car manufacturer. Their CEO, Martin Winterkorn, was forced to step down after saying he was “shocked” by the events of the past few days” and “stunned that misconduct on such a scale was possible” in the company. The new chief executive, Matthias Mueller, convened a stress-filled meeting of the company’s top managers at Volkswagen headquarters in Wolfsburg, Germany and pledged to “do everything to win back the trust of our customers, our employees, our partners, investors and the whole public.” He better.

Time is of the essence, too. More than a third of Volkswagen’s market value has vanished in the wake of the crisis. And now the company says 11 million of its diesel vehicles worldwide need to be retrofitted to replace secretly-installed software that allowed them to evade emissions standards. The cost for such repairs is expected to reach into the billions of dollars, something Germany’s leaders say could wreak havoc on the country’s economy. Nevertheless, there is no quick fix for a crisis that has badly damaged the Volkswagen brand and sent shock waves through its once-devoted customer base.

“We are facing a long trudge and a lot of hard work,” Mueller told the company’s leaders, according to media reports. “We will only be able to make progress in steps. And there will be setbacks.” Volkswagen now says it is sifting through the initial data of its investigation into how and why the improper software was installed. But what the company must do now is be completely transparent – and to act with absolute integrity going forward. The public – and not just the car-buying segment – needs to know:

  • exactly what happened every step of the way in this sad, dreary tale.
  • the timeline of transgressions, all the parties responsible and what their motivations were.
  • how many company officials knew about the secret emissions software and how they are being held accountable.
  • the short- and long-term consequences of this breach in trust and how the company plans to ensure compliance going forward.
  • what the owners of the affected vehicles need to do to have the “cheat” software removed, and whether this will affect the vaunted gas-mileage ratings the company has touted for years.

Dieselgate is by far the biggest crisis the company has ever faced. How it reacts in the coming days and weeks – whether nimbly and openly or haltingly and with obfuscation  – will surely determine its fate going forward.

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