Blog

#PRFail: VW Chokes on Their Own Exhaust

The Latest Fallout from the Volkswagen Scandal

We live in some very intense times. At times, we appear to border on complete lunacy and violent output and simultaneously seem to verge on total Renaissance. We have the ability to instantly connect with virtually anyone on planet earth. Yet we pick up rifles instead of keyboards. To say we are sitting in a rather penetrating dichotomy would simply be an understatement. How we handle ourselves in the media is of utmost importance. News travels at the speed of social media and that is mighty fast. Each MoJo issue will take a deep look into recent public relations developments and you help choose was it a pass or a fail?

Number 1 on our PR Hit Parade this month, is that erstwhile German automotive company Volkswagen. They have certainly let the proverbial stuff hit the fan. Whether it was discovering World War II bombs at their manufacturing location, being banned in South Korea or lying about their emissions, Volkswagen has brought themselves a world of hurt.

Being on the wrong end of the PR stick is nothing new for the company. You see, Volkswagen was Hitler’s pet and was under the control of the Nazi party at its inception in 1937. Volkswagen was declared the People’s car company. (1) Didn’t know that, did you?

Initially, sales in the U.S. were very slow due to this Nazi heritage. But then entering the scene in 1959, was advertising agency Doyle Dane Bernbach. They launched their landmark campaign, dubbing the car the “Beetle” and spinning its diminutive size as a distinct advantage to consumers. Over the next several years, VW became the top-selling auto import in the United States. Obviously, that is no longer the case, for good reason.

Now let us take a look at the debacle that Volkswagen has recently gotten itself. Yes, Volkswagen has made the news, but not necessarily the headlines you would like to see for your company.

Nothing like a good headline or two in The Wall Street Journal:

Volkswagen Executive in South Korea Indicted in Emissions Case
German Prosecutors Seek Punitive Damages from Volkswagen

Or Reuters:

Volkswagen may face shareholder calls to reclaim executive bonuses

How about The New Yorker:

The Volkswagen Settlement: How Bad Management Leads to Big Punishment

And a couple others:

World War II Bombs Found at Volkswagen Headquarters in Germany
U.S. Regulators Are Making Volkswagen Pay. But Its Punishment Won’t End There.

The Latest Fallout from the Volkswagen Scandal

How could Volkswagen have avoided this PR debacle? Well they could not have falsified the emission findings to begin with using their squirrel software. Nevertheless, some unscrupulous folks sabotaged the company with their stupidity or whatever it was (I am being nice, btw). What did Volkswagen do to handle the situation aside from the initial lies? They decided to buy the market, compensating buyers in America to the tune of almost $15 billion dollars. Makes you wonder how a company could survive such a payout. Sounds like they made a killing that hasn’t exhausted them yet (pun intended). Now that was supposed to be a PR coup so what did Volkswagen do next? Paid their management bonuses. That’s a sure way to win over the public (read sarcastically)!

Two pieces of trivia for you. Did you know, that Hitler actually called in an Austrian automotive engineer, none other than Ferdinand Porsche, to design a “people’s car.” (2) And I will give you two guesses as to who owns Porsche today – yep that’s right Volkswagen. Volkswagen is the parent company not only for Porsche but also for Audi, Lamborghini, Bugatti, Bentley, Seat, Skoda and a few more. They have to hope that the Volkswagen PR stigma does not rub off on them. But, alas, it already has.

Check out the latest headline in the NY Times: Volkswagen Scandal Reaches All the Way to the Top, Lawsuits Say

Basically VW lied about the scandal being “limited to a small group of people,” but evidence shows now that it went all the way to the current CEO and was company-wide corporate culture that “allowed” (ha – more like created, encouraged) a “willful and systemic scheme of cheating.” (3)

The scandal has been going on for 10 years before they were caught – and guess who was over Audi at the time? Yep – you guessed it. VW’s current CEO (who was awarded about $70 million in bonuses last year). It was actually Audi engineers that developed the ‘defeat device,’ in which the software was used in VW cars that would detect when cars were undergoing emissions tests. (3) Last month VW offered to pay nearly $15 billion, a record, to settle claims in the US by VW owners and regulators. But apparently this isn’t going to be enough: Check out the high-level of fraud here of how they configured the software to work. Not just Volkswagen owners have a bad taste in their mouth, but the government and entire automobile owning public does not think well of them. Apparently even when caught, they lied.

What will it take to get their reputation back?

  • Tell the truth.
  • Put heads on pikes. Hire new executives. Do a systemic sweep of all criminals.
  • Do market research on car owners and truly find out how the public feels about them and what it would take to get on their better side.

Money doesn’t buy respect – what is VW doing to restore trust?

Perhaps they could be doing some charitable events or finding ways to give back to the community and actually HELP. But truly do it from the aspect of making amends. They are a liability – the public won’t really trust of accept one back until amends are made, above and beyond the ordinary demands of what a car company should be doing. Unfortunately, they had to be exposed to come clean – and even then they seem to still be trying to cover up. It will be interesting to see what else unfolds.

A market research survey on a grand scale could find the underlying cause of the situation and provide solutions. Otherwise, they are just grasping at straws. I almost wrote gasping at straws – that might just sum it up as well.

If you were Volkswagen, how would you have handled the incident(s)?

  • “Volkswagen Is Founded.” History.com. A&E Television Networks, n.d. Web. 21 July 2016.
  • “Ferdinand Porsche.” Wikipedia. Wikimedia Foundation, n.d. Web. 21 July 2016.
  • Ewing, Jack, and Hiroko Tabuchi. “Volkswagen Scandal Reaches All the Way to the Top, Lawsuits Say.” The New York Times. The New York Times, 19 July 2016. Web. 21 July 2016.