Volkswagen Emissions Scandal

Team Project Paper - Volkswagen Emissions Issue

1) EXECUTIVE SUMMARY

Volkswagen, or “people's car” is a well known car manufacturer originating in Germany. The company was formed in the early 1930’s by order of Adolf Hitler to make a car that the average German citizen could afford, and to be designed by Ferdinand Porsche (biography.com). VW transitioned quickly into the production of military vehicles during World War II, and at this time the company, managed by the Nazi party, employed slave labor from concentration camps to build cars. Many journalists have speculated that it was this period of VW’s past, as well as its strong ties to post-war West Germany, that fostered the poor leadership that lead to more recent issues at the company.

The Volkswagen Type I (Beetle) was first introduced into America in 1949, and by 1972 had surpassed the Ford Model T as the most produced single car model in history with over 15 million cars sold at that time (carandriver.com). Since then the manufacturer has become a market share leader in the auto industry, with great success in markets around the world.

The past several years at VW, however, have been rough. In 2015 the company was charged by the EPA with violation of the Clean Air Act. This scandal has revealed serious manufacturing and leadership issues within the company. Affecting over 11 million cars worldwide with illegally rigged emissions testing software, the company has experienced resignations and arrests at the very top and all throughout the company. In the analysis below we will be taking a closer look at the Problems going on inside and outside VW, Evidence of what is going on, an Analysis of the issues, and possible Solutions for the company.

2) PROBLEMS

Macro – Outside of the Organization

For years Volkswagen has been promoting the fact they are eco-friendly with their “clean diesel” engines used in Porsche, Audi, and Volkswagen products and they pushed that they were better alternatives to hybrid and electric vehicles. Many years passed and everything was going fantastic and the cars seemed to be holding true to what the advertisements were stating. So what went wrong? Turns out, Volkswagen was installing a dual-strategy software on their TDI vehicles (more than 500,000 in the United States alone and over 10 million worldwide) that gave them the ability to sense if it was on dyno for EPA testing purposes. When in testing mode, the vehicles would alter the amount of AdBlue injected into the exhaust, the fuel pressure, and the timing of the vehicle; decreasing performance but it would pass the EPA test with flying colors. When on the road however, the vehicle would switch to a separate mode, emitting up to 40 times higher NOx levels than the federal limit. NOx is a diesel