Volkswagen CaseEssay Preview: Volkswagen CaseReport this essayVolkswagen is a German car manufacturer, the second-largest car market globally, with numerous brands under its umbrella. It has channeled resources towards environmental goals, through objectives such as reducing greenhouse emissions and fuel consumption, enabling alternative fuel use and avoiding hazardous material use. The brand has produced various models of both electric and hybrid cars, in line with environmental sustainability efforts.However, in September 2015, it was revealed that Volkswagen had been fraudulent with their green efforts relating to their diesel vehicles launched from 2009 to 2015. Having marketed these models as environmentally friendly with minimal emissions, it turned out that a defeat device had been installed on the vehicles’ hardware, allowing them to identify an emission tests taking place, and artificially suppressing emission levels below its true operating values. This allows them to circumvent emissions testing, deceiving their consumers on the environmental sustainability of their products who had relied on that information in their automobile purchasing decision.
There has been an immediate material impact on the firm’s performance, significantly from the fall in share price as the markets reacted to the news. Sales figures have fallen as car buyers distrust the brand after the occurrence of this PR disaster. The loss of credibility is also extended to the entire automobile industry as a whole. Volkswagen is also facing a 40 billion euro lawsuit from its investors.There is a clear indication that Volkswagen has affected many stakeholders from their utter lack of CSR. There are however some car owners that are unwilling to under the repairs to undo the damage, as it would reduce their fuel efficiency, a clear indication that environmental concerns are not shared by everyone. It is clear that the financial performance of Volkswagen took a big hit from their fraudulent sustainability practices.
[np-related]
[/np-related]
Karen Brown, founder of Greenpeace Canada and former head of the Canadian government’s Institute for Climate Change Governance, said “If VW is a disaster, then this is the biggest environmental disaster I’ve been in since 1984.”
“The worst things in this industry that are ever going to happen are what have happened to us every step of the way.
“So I think all this is all being driven out the doors.”
The industry’s financial troubles hit the Canadian labour force at their most urgent, where there were only a few days of public meetings held before the government allowed VW to raise its emissions level to meet demand.
Volkswagen’s new chief executive, Matthias Mueller, recently said he has been in touch with Volkswagen’s corporate headquarters to provide an update, but he did not offer a detailed timetable.
Kell, a former corporate executive at Chrysler Motor, also said there was a “massive disruption” in the company’s manufacturing and distribution networks, with a 30 per cent drop in sales and $18.4 billion loss in its gross revenues.
“A huge shift of things and a huge loss of credibility,” said Kell, who was chief auditor at Wells Fargo Group at the time. “I think everything is happening at VW in a very bad way right now, and we’re not even really understanding it yet.”
[np-related]
A senior Greenpeace figure familiar with the company’s processes said the company needs not only more public comment, but also a “better, more transparent” approach to dealing with the issues.
“VW’s actions appear to be to the public at large as a whole where they get a little bit of public attention right now and then some of it is made up for by their own arrogance,” said Bob McKeown, a retired senior corporate officer at Greenpeace Canada.
“Unfortunately it’s not going to be happening in the usual way.
“We certainly see this as a challenge for this industry and for Canada, because if you keep coming here after you run VW, you get the kind of reaction that it’s going to take from the public in Canada. It’s something that I’m very concerned about, but we do have a problem that has got to be dealt with.”
McDavid, the Canadian prime minister, has been criticized for not looking at other issues. He once suggested to a Canadian public meeting about the company’s alleged corporate governance and alleged human capital lapses in the diesel engine system that he didn’t want him to know about.
Asked about the allegations, NDP Leader Tom Mulcair said he had contacted him “to sort it out and ensure that any allegations of corruption or incompetence are actually serious issues at Volkswagen. Hopefully this will soon move into the public interest and to get rid of the problems that have arisen.”
The Conservative leader, meanwhile, had been asked again to explain how he would deal with the problem.
“No comment,” he responded as he left. “We’ll look into this further and we will let you guys know if anything surprises us or doesn’t.”
[np-related]
Mulcair said Wednesday the company should not get stuck with the “one person’s job and one scandal at Volkswagen and a scandal with every other automotive firm,” as Volkswagen