Saturday, September 26, 2015

(The Big Disrupt) Volkswagen: Volkswagen cheating is just the tip of the iceberg

Volkswagen cheating the EPA’s emission test might have sent shockwaves but it didn’t surprise or shock me that a billion dollar corporation cheated on a test for six years straight that would have cost them billions if they failed it. It should be common knowledge that a company as large as Volkswagen sole aim is to make returns on their significant investments and are liable to do whatever it takes to avoid or eliminate anything that impedes their simple if not narrow objective.

However, I grant you that if this was strictly true, Volkswagen executives and engineers it might have calculated that it would have been cheaper for them fail the emission test than cheat and deal with the mother of all nuclear fallouts if they got caught. Since they admitted they cheated, the company has lost a third of its value, drawn the ire of their customers, lost their CEO, opened themselves to a wrath of potential legal cases and fines, and suffered reputational damage that’s looking irreparable.

The thing that surprises me about the whole debacle is that Volkswagen knew that they would fail the diesel emissions tests without cheating, knew what would happen they got caught, were aware it might have been cheaper and whole lot less stressful to fail the test but decided to cheat anyway.

However, what also concerns me is not that they were prepared to roll the dice and pay the price to avoid failing the diesel emissions test, it’s the fact that they knew that their cars are more harmful to the environment (not to mention people) than they let on and were prepared to sell 11m polluting diesel cars around the world just to make their numbers.

Volkswagen could face billions in fines and a criminal investigation in the US alone, a wrath of lawsuits from VW customers across Europe (Europe represents diesel’s biggest market) who fell hook, line, and sinker for the “clean diesel” phenomenon, and even repercussions in Germany as according to Alexander Dobrindt, Germany’s Transport Minister, “ the carmaker had manipulated test results for about 2.8 million vehicles in the country”[1]. The company said that it will set aside $7.3 billion for fines and but with scale of the scandal expanding at every turn, it look like they’re going to need more than that to say the least.

In sum, Volkswagen will have hell to pay as VW’s emissions test scandal is only getting started as it’s quite clear that they aren’t the only carmakers trying to deceive regulators and customers.

[1] A. Cremer, 2015, Volkswagen Picks company veteran to tackle emissions crisis,

No comments:

Post a Comment


Related Posts Plugin for WordPress, Blogger...