Volkswagen Has Fallen and It Can’t Get Up

From bad PR to a crisis of public confidence--Volkswagen’s tarnished image gets worse.

Take II on the PR disaster that has tarnished Volkswagen. In September, we learned that VW equipped millions of its diesel vehicles with software that allowed it pass EPA emissions tests, while otherwise polluting at a rate that would never pass regulatory muster.

Caught red-handed, Volkswagen ’fessed up, agreed to fines, fired some high-level executives, dumped the CEO, Martin Winterkorn, and moved the head of its Porsche division, Matthias Müller in as the new CEO. All necessary steps. Except maybe the last one.

Because, wait. There’s more. The EPA has discovered more un-sanctioned software on more cars—this time on vehicles from Audi and Porsche, both divisions of Volkswagen.

Herr Müller has some erklären-ing to do. Especially since he vowed to thoroughly investigate VW’s cheating, and because these new revelations came from outside investigations by regulators in California and Canada, not from Volkswagen. Oh, and this time, VW is denying the findings.

Much of the media coverage surrounding the initial appointment of Müller noted that he had a gargantuan task ahead: regaining public trust, dealing with multiple international investigations, paying billions of dollars in fines and the costs of fixing millions of vehicles, not to mention keeping the company afloat. There were, however, a few questions regarding Müller as an appropriate choice. He had deep and long-held ties to Volkswagen and to Winterkorn.

I’m not implying, nor should the reader infer that Müller was in on the installation of cheating software in Volkswagens, Audis, or Porsches. But this latest revelation makes one wonder, was anyone asking the difficult questions internally before Müller was put in the heated driver’s seat?

  1. Did you know anything about this? Tell us now—don’t let us find out in three months.
  2. Is there more bad news for investigators to find? Tell us now—don’t let us find out in three months.
  3. With a crisis this huge, regardless of who it is, what are the optics of promoting from within? Should we bring in a “white knight” CEO?

To be sure, this crisis goes way beyond bad PR for Volkswagen—and now Audi, and Porsche. This is a crisis of everything: public trust, investor confidence, government compliance, company solvency, and legal liability. But these latest revelations come at the worst possible time—when the company was trying to portray a posture of contrition and reparation—and their impact could have been mitigated had someone who was thinking about public relations in the truest sense, spoken truth to power, and had power told the truth.

 

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