Volkswagen Should Respond Primarily with a Technological Solution

Position paper

“Volkswagen should respond primarily with a technological solution”

Introduction

In 2014, independent researchers found that Volkswagen diesel automobiles being sold in the US were generating exhaust emissions that exceeded the federal regulations by as much as 40 times. The US Environmental Protection Agency began an investigation, but Volkswagen initially denied any wrongdoing.

In September 2015, Volkswagen finally admitted that it had installed "defeat devices" and software in 11 million vehicles worldwide. These vehicles would detect when an emissions test was occurring, and would adjust the engine’s operating parameters to generate emissions below US and EU limits. Under normal operating conditions, however, the vehicles emit significantly higher levels of emissions.

Volkswagen CEO Martin Winterkorn apologized and resigned. A number of other top managers were fired (CNN 2016). By June 2016, Volkswagen agreed to a US settlement, including buy-backs of automobiles, that will cost the company up to $14.7 billion.

In this paper, we will take the position that...

In recovering from the emissions scandal, Volkswagen should respond primarily with a technological solution (distance itself from diesel technology) in external communication.

This is in contrast to the position that Volkswagen should “respond primarily with a cultural solution (rethink its organizational culture)”.

We will assume that Volkswagen’s goals are:

• to repair its reputation and credibility with car buyers, general public, and governments;
• to recover from lawsuits, financial penalties levied by various governments, and the settlement with the company financially intact;
• to, in the medium to long term, bring to market automobiles with clean, zero- or near-zero emission technology, and to manufacture standards-compliant diesel and gasoline automobiles in the meantime until the new technology is economically viable;
• to continue to aim for the goals of being the number one automaker and earning an 8% profit margin; and
• to prevent any future ethical lapses and scandals.

In analyzing the situation, we will aim to take into consideration the following stakeholders:

Argumentation

Volkswagen has already admitted to wrongdoing; the company has already apologized; the CEO Martin Winterkorn (who “centralized decision-making” with himself and who “highly discouraged the open discussion of problems” (Monti et al. 2016)) has resigned; many top and middle managers have been fired; the company has agreed to a $14.7 billion settlement in the US; and the company will be liable for fines and penalties still to be imposed by various governments around the world. These events have already had a significant impact on the culture and management structure of Volkswagen, and there likely exists an atmosphere of fear that would make Volkswagen staff think very carefully about ethical issues. New CEO Matthias Mueller confirmed that the scandal had already sparked cultural changes, stating, "The crisis has also opened doors… It forced us to strengthen and speed up overdue changes, and to set new priorities. To turn this crisis into an opportunity has been my goal from the beginning" (Tovey 2016).