I’m so disappointed to hear about the Volkswagen emissions scandal. Don’t get me wrong, I’m no “petrol head”, nor am I the owner of a Volkswagen car. I’m a mum, a dedicated consumer and self-confessed optimist.
So when I hear that Volkswagen has deliberately misled us over emissions I feel terribly let down. I simply expected more from such as well-respected brand.
So, what did they actually do?
Following an investigation from the US Environment Protection Agency (EPA) VW has admitted to intentionally rigging emissions tests in diesel-powered cars. It appears that software was programmed to switch engines to a cleaner mode during official emissions testing. After testing the software switches off and the same cars were found to emit as much as 40 times the legal amount of pollution.
VW have now stopped selling diesel models in the US (representing a quarter of their sales). The share price plummeted 20 per cent within 24 hours of the news breaking, they potentially face fines of up to $18 billion, criminal charges for their executives and are likely to be beset by a number of class action lawsuits in the US. An investigation into their European emissions testing has just started and who knows what that may reveal. Is it possible that the car industry is just as flawed as the financial services industry?
Empty promises
Ironically Volkswagen is the brand that said, “if only everything in life were as reliable as a Volkswagen”. The brand that aims to become the most “innovative and sustainable volume carmaker in the automotive world by 2018”. And – this is the really important part – they will do this through “Think Blue” their initiative “to make products and production even more environmentally friendly”.
Hmm … their friends at the EPA may not agree.
Unfortunately, the VW lie just keeps unravelling. For the past 4 years they have been using Think Blue as the platform for their brand communications – Think Blue Symphony, Think Blue Book, Think Blue Baby. Perhaps these campaigns are unrelated but from the outside looking in, it feels like a very large scam.
Can they recover?
Where to from here? Other auto brands have survived major scandals. In 2009-11 Toyota had an accelerator defect causing vehicles to speed out of control and fail to respond to the brake. They paid $US1.2 billion to settle US criminal charges and recalled 12 million vehicles, costing them $US2.4 billion.
General Motors waited almost 10 years before recalling 2.6 million cars with faulty airbags, a problem that was linked to at least 124 deaths and 275 serious injuries. Outside the auto sector this scandal has been likened to the 2010 BP oil spill in the Gulf of Mexico, which begs the question – is it worse to deliberately deceive or to make a devastating mistake?
Team VW
Certainly the damage to the Volkswagen brand is immense, but what of the damage to their people, the 592,586 staff who turn up to work every day? As production of diesel cars is on hold, the implications for VW workers are potentially devastating. CEO Martin Winterkorn has already stood down, but sitting on a €14.9 million pay package, this should be easier to bear than plant workers facing salary cuts or possible redundancies.
Winterkorn issued an apology and ordered an external investigation into the matter. “The board of management takes these findings very seriously,” he said. “I personally am deeply sorry that we have broken the trust of our customers and the public.” Disappointingly no mention of his employees, those who may bear the brunt of this fiasco and who’ll have to painstakingly rebuild VW from the inside out. What, I wonder, is ‘in it for them’?
Authentic leadership
So how will VW measure the internal fall out of this scandal and what will they do to recover? I’d suggest this is a test of leadership and a time for leadership – leadership that is authentic, humble and determined to do better, the Level 5 Leaders Jim Collins talks about. From our research tool Cultural Advantage we know that pride in your organisation and confidence in leaders are two of the most important factors in building a high performance culture, two things that are incredibly damaged at VW.
VW needs leaders who will come clean, acknowledging what went wrong and determined to make amends. They need to create a culture that is focused on everyone doing their best every day and doing the right thing, where everyone is aware of and invested in protecting the VW brand and reputation. They need to rebuild pride and trust in their organisation, from the inside out. I want to hear stories from employees about how VW are putting things right, stories that demonstrate how their leaders are contrite and steadily rebuilding confidence. I’d like to see the executives, who have enjoyed the privileges of leadership now lead by example.
So are VW just another brand that have single-mindedly pursued their own financial goals over and above honesty, customer or community need? Can we really forgive the deliberate deceit and lies? This certainly is a game changer, perhaps for the whole automotive industry. And as we watch what unfolds, mindful that brands and leaders are measured on how well they manage through the tough times, it’s hard to tell how much the loved and trusted VW brand will help them through or for the brand that created such high expectations will this fall from grace prove fatal?
Image source: iStock
