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Diesel Gate

Chirayu Bar Singh Thapa

Westcliff University

BUS 600: Managerial Communications

Professor Tiwari

September 29, 2020

Abstract

The paper talks about Volkswagen and the Diesel Gate scandal as the main crises. It

talks about how the company handled the situation when they were first accused, then when

they had to pay the 22 billion fine, and their new resolution to the scandal.

Keywords: Volkswagen, Diesel gate

Diesel Gate

Volkswagen is an internationally known German automotive manufacturing

company, which was involved in an unethical business crisis in 2015; selling cars that had

“defeat device”, basically a software in diesel engines that could detect when the cars were

being tested and falsify emission tests to improve the performance results[ CITATION Mar17

\l 1033 ].

In 2005, VW manufactured a new diesel engine, “the EA 189” to comply with the

strict US pollution standard with the end goal of reducing nitrogen oxide emissions. It was

believed that a team from VW came up with an idea to use a “defeat device” and cheat the

system. And ever since, they have been getting away with such immoral acts until September

2015. On September 15th 2015, VW finally admitted to fitting “Defeat Devices” on 11

million cars worldwide[ CITATION Hot15 \l 1033 ].

When a business is accused of any fraud, they either own up to it or deny the fact. In

May 2014, VW was initially warned by the California Air Resources Board (CARB)

regarding a study published by the International Council on Clean Transport (ICCT) about

the discrepancy between official lab testing and actual emission on the road. A memo about

ICCT’s study was sent out right away to Martin Winterkorn, former chief executive, along

with the VW group CEO[ CITATION Leg18 \l 1033 ]. 

According to Reuters, it is unsure whether Winterkorn took the memo seriously or

not. When a group of senior engineers were questioned by the US Regulators, they were

claimed to have set a strategy to conceal the charges while appearing to cooperate according

to BBC. In addition, Winterkorn was also given a clear understanding of how VW was

deceiving the US along with possible consequences of such actions and yet it was believed

that he chose to conceal the existence of the defeat device[ CITATION Reu17 \l 1033 ].  
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Crisis Management

We could see signs of attribution as the first response that was public, was related to

limiting the damage and crisis management. The first response regarding the cheat devices

also talked about it being used in small groups rather than the whole company. People did not

know that it was already active on 11 million cars. Volkswagen also talks about finding the

concerned parties and holding them accountable[ CITATION Mar17 \l 1033 ].

The company also fires back at the tests stating that there are differences between a

normal road going car and one scheduled for a test. The American anti-pollution law was not

met as the company was worried about costs and to meet deadline of their projects.

Volkswagen then sent a number of statements that talked about the reliability, the

stature and credibility, and the solidity of the company. The company also portrays that the

scandal is completely polar opposite to the Volkswagen core philosophies and principles. The

statements also proceeded to state that the company was ethical. As the company is one of the

largest and most reputed, they kept on portraying this message. The company also puts forth

their spending on R&D for plug in hybrids and green initiatives to mask the eyes of the

consumers.

There is outright denial by former CEO to the UK transport Committee, that he was

completely unaware of the malpractice. Not only this, but he then talks about the whole

industry being dogged by this problem. He attempted to reverse this on to the car industry by

talking about the industry wide problems regarding emissions.

None of this failed to hold as the company had to play settlements worth 22 billion

dollars over the next 10 years to the United States of America. In Europe, the company

provided software updates on all models with the problem to ensure that it showed the actual
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data. With the German government involved, they tried to ensure that the company was

sheltered in Europe.

Volkswagen understood their wrongdoings. They relied on the offense reduction

strategy more than any other to try to bring back the company’s image[ CITATION Mik19 \l

1033 ]. The response that Volkswagen was providing visual imagery of an individual

apologizing to everyone. The company was also personified and they talked about how

deeply sorry the whole company was. These are forms of mortification. The company also

changes dynamics by telling the people that the company volunteered to come to the British

transport committee rather than them having to be coerced.

The company also downplayed the total damage dealt by the cheat boxes. It made

sure to ensure that the safety and the legality to drive their cars was still present. The recall

strategy was also made simple to ensure that the car dealers would not have problems. They

showcased that the law was broken in just a small infraction, showing the public that their

cars were still cost effective[ CITATION Pai17 \l 1033 ]. The company tried to show that

there was no problem at all. Artistic and euphemistic language helps to coerce the customers

and the public. Volkswagen also always defended themselves by denying defeat devices were

used for the production of engine irregularities. They said that labelling the device as a defeat

device was wrong. The company’s stance and language tries to show the public that there are

no legal problems the company has to deal with[ CITATION Pai17 \l 1033 ].

The long term response that Volkswagen had for the diesel gate scandal is finally

coming to fruition. The visible scar made the company transition and become a producer of

all electric cars. They have created a new factory and created 4 new models for different cars.

The biggest scandal of the motoring world changed the course monumentally.
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We can see how big of a problem VW had dug themselves in that apart from paying

22 billion dollars in fine, they also spent more billions in order to create cars that would never

emit gasses[ CITATION Bak19 \l 1033 ].

I would have set up a new crises response team for VW that was fully committed to solving

the issue. There is a reason as to why Volkswagen payed billions in fines. They polluted a

substantial amount[ CITATION Mar17 \l 1033 ]. Europe did not show the same level of

punishment as the US, primarily because of the German influence. Germans have no

problems with gas.

Conclusion:

The company’s performance analysis throughout the crises is commendable. There is a set

amalgamation of crisis management, attribution, information orientation and image

restoration. The company kept on denying the allegations and had to accept the legal fines.

They worked well to downplay the threat and the damage that was caused. They are still

restoring the image of the company as it is not something that can be repaired easily. The

electric line-up is also physical proof that Volkswagen is apologetic and sorry for the fiasco.

Their view has been portrayed effectively by the company. The company has handled the

crises in the same way as the Fukushima nuclear reactor disaster and the Deepwater Horizon

Oil Spill.
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References
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https://www.bbc.com/news/business-34324772

Legget, T. (2018, May 5). BBC . Retrieved from BBC News:

https://www.bbc.com/news/business-44005844

Markowtiz, E. M., & Chapman, D. A. (2017). A corporate scandal that hits close to home:

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https://www.reuters.com/article/us-volkswagen-emissions-timeline-idUSKBN14V100