Bus 623 - the Volkswagen Scandal

The Volkswagen Scandal

Samantha Swarts 4056040

BUSN 623

December 13th 2015

Abstract

This paper will take an in depth review of the automobile production company, Volkswagen. Volkswagen has been a widely popular and trusted name in vehicles since the 1960s up until fall 2015 when it was discovered that VW created software that intentionally produced false emissions output when being tested. Not only did they create a deceptive software system in order to make their vehicles appear more eco friendly, they also understated their fuel consumption as well. Discussions of the ethical frameworks of egoism and free market principles will be applied in order to help the reader understand how and why VW would intentionally deceive the public with intentions for vehicles to appear ‘greener’ than they truly are.

History of Volkswagen

Volkswagen AG is an internationally popular, German-made commercial and passenger vehicle manufacturing company based in Europe with manufacturing facilities in America as well as Germany. Volkswagen is a German name meaning ‘people’s car’ that was designed by Ferdinand Porsche and approved for production by Adolf Hitler in 1938 and a Volkswagen plant was established in a town called Wolfsburg (Wilson, 2010). Production of personal vehicles came to a halt during World War II, and the Volkswagen became a plant that produced vehicles for the German military. During the years of 1935-1945, there were over 12,000 prisoners of war that were working in the Volkswagen factory (Wilson, 2010). After the plant was bombed and captured by U.S. troops in 1945, the Volkswagen plant was reorganized and ownership of the plant was given to West Germany (Wilson, 2010). Over the next several years, VW produced the Type 1 Beetle as well as the Type 2 van and a camper; sales started out slow and began to increase drastically by the year 1955 (Wilson, 2010).

        The Type 1 Beetle was hands-down VW’s most popular and desired vehicle in 1968 Disney even released a movie based on a VW Beetle having its own mind (Wilson, 2010). Volkswagen created a luxury brand as well called Audi in 1969, and by 1972, over 15 million VW Beetles had been produced, beating out the Ford Model T and making the Beetle the most desired and produced vehicle in history (Wilson, 2010). Over the years VW started developing more models like the Jetta and Golf, and a production plant was created in Pennsylvania to accommodate the American desire for VW automobiles. With the luxury brand being Audi, VW also acquired Lamborghini, Bugatti, and Bentley to add to their line of luxury brands (Wilson, 2010).

        Volkswagen kept growing in popularity as their vehicles were small, compact, and got great gas mileage. Another American plant was produced to accommodate the mass popularity of VW vehicles as well as to keep up with the competition of the popular Toyota Camry and Honda Accord; this plant was established in Tennessee (Wilson, 2010). In 2009, VW and Porsche announced a merger and VW purchased 49.9% stake of Porsche for a whopping $5.75 billion dollars, a few months later VW also bought 19.9% stake in Suzuki for $2.5 billion (Wilson, 2010).