Emissions Scandal Revealed

martin_winterkorn_2015-03-13_001
Martin Winterkorn, former CEO of Volkswagen AG, parent company of the Volkswagen group of America.

Peter Mock, European managing director of a clean-air group first found discrepancies in the European tests when testers driving the vehicles noticed the Volkswagen vehicles spewing harmful exhaust, but were fine in the lab.  Mock reached out to his American counterpart, John German, and together they were sure the U.S. versions of the vehicles would pass the emissions tests due to the U.S. having higher emissions standards than the rest of the world and a history of enforcing them.  German asked West Virginia University for help seeing as they had a portable emission measurement system while the California Air Resources Board tested the vehicles in the lab.  Sure enough, the tests in the laboratory passed and the tests using the portable system failed with nitrogen oxide emissions exceeded standards by up to 35 times [1].

With news of the “defeat device” software in a half-million diesel vehicles sold in the United States from 2009 to 2015 and millions more in Europe, Martin Winterkorn resigned from Volkswagen on September 23, 2015.  The pressure from the CEO on Volkswagen’s engineers to deliver a clean diesel vehicle with good fuel economy and low emissions was tremendous.  With Winterkorn no longer CEO, Volkswagen agreed to fully cooperate with the investigations and ordered their own external probe on the issue [2].

michael-horn
Michael Horn, former President and CEO of Volkswagen Group of America.

The group halted sales in the United States of the 2-liter diesel vehicle soon after the news broke of the scandal in September and eventually halted the sale of the 3-liter diesel vehicle from its Volkswagen, Audi, and Porsche ranges.  In January of 2016, Volkswagen began recalling cars in Europe to fix the diesel emissions issue and later in the United States [3].

Michael Horn apologized and said the company is “determined to make things right.”  He also stated, “let me be clear, we at Volkswagen take full responsibility for our actions and we are working with all relevant authorities in a cooperative way.  I am here to offer the commitment of Volkswagen to understand what happened, and how we will move forward” [4].

Horn managed to outline a series of actions Volkswagen would be taking to try to correct the situation including conducting global investigations, developing remedies, and communicating openly.  Horn also said they would be examining compliance and standards, creating a service line and website for the public to access, and sending a letter to every affected customer.  Horn also stated, “these events are deeply troubling. I did not think that something like this was possible at the Volkswagen group.  We have broken the trust of our customers, dealerships, and employees, as well as the public and regulators” [4].

In my personal opinion, I would agree with the approach they are taking.  At this point they have already been caught in the act so it would be best to cooperate with all relevant parties as well as communicating openly.  I think it would be beneficial for Volkswagen to not rush the process per say, but to cooperate as efficient and effectively as possible and offer up as much information as they can in order to get past this scandal and begin moving on.  I think it would be best for Volkswagen to begin reestablishing their relationship with their customers and to begin earning their trust back.  I have never been a huge fan of Volkswagen vehicles, so this whole emissions scandal has likely turned me away for good.

References:

[1] Bloomberg

[2] Car and Driver

[3] CNN Money

[4] CNBC

[5] Martin Winterkorn

[6] Michael Horn

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4 thoughts on “Emissions Scandal Revealed

  1. Michael Horn had to step down from his position as CEO. Who took his place? Is that person doing something to make up for the unethical decisions made? Is Horn facing any legal trial for mismanagement? Does he hold a lower-level position in the company or does he not work there anymore?

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  2. When Michael Horn stepped down through mutual agreement with Volkswagen AG, Hinrich Woebcken, head of the North American region and Chairman of Volkswagen Group of America took his place. Woebcken is working to restore customer relationships in order to build the company back up as well as work with all necessary parties during the investigation. Horn has been named in a lawsuit against Volkswagen along with Martin Winterkorn and other executives, which may have led him to resign, but to my knowledge he has not been charged for mismanagement. I believe Martin Winterkorn, now former CEO of Volkswagen is being criminally investigated. Michael Horn resigned to pursue other interests and is no longer working for the company.

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  3. Do you think that Michael Horn should have been in the position of CEO and fix this whole problem or he did well to “taking a step to the side” because the image of the company was at risk, without counting the tremendous loss of money caused this scandal?

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  4. Just to clarify, Winterkorn was CEO of Volkswagen in Germany, but Michael Horn was CEO of Volkswagen Group of America, the American sector of the company. I don’t think Horn could have solved the problem if he stayed in his position, but I think he did what he could towards taking steps to correct the problem. With Horn being Volkswagen Group of America’s CEO at the time of this crisis, he is ultimately responsible for what goes on below him. I don’t think it would have been beneficial for himself or the company if he were to stay any longer.

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