The Car Manufacturing Giant, Volkswagen, Admitted

Volkswagen is one of the largest automakers in the world and it has a global reputation as a high-quality German auto brand. Social responsibility is included in VW’s corporate culture and it seems that Volkswagen made some advances in Corporate Social Responsibility because the corporation was ranked 11th 2015 in the Global CSR Rep Track 100, which listed companies by reputation (Reputation Institute, 2015).However, the company has been threatened by an emission scandal which broke in September 2015, when the Environmental Protection Agency (EPA) disclosed that Volkswagen had installed defeat devices on diesel cars which were sold in the US. These devices equipped on VW cars cheated regulators in such a way that it could detect

The mistrust between the Volkswagen Company and their customers developed after the scandal associated with the incorrect emission of data and cheating of the system unfolded.  The scandal occurred on the eighteenth of September 2015 when it was found that the company had made a car with a turbo that released emission directly into the real word atmosphere. The allegations were genuine and were proved by the Environment Protection Agency in the United States (EPA) (Hotten, 2016).The chief

Volkswagen is under investigation following reports from the EPA that they had installed software into their engines that deceived emissions testers. Furthermore, engineers updated this software in 2014, claiming that they were improving the vehicles. James Liang, a senior engineer who had worked for Volkswagen for 30 years, admitted to investigators in September of 2016 that he had designed the software in question. Further investigation has revealed that this conspiracy may have involved executives of the company. It is unknown to the public whether Liang was acting under orders when he designed the software or he decided to create it on his own to meet requirements his superiors gave him. Both rule utilitarianism and Kantian duty ethics

Volkswagen company put sensors in the emission component, so when tested, the examiner sees that the car meets emission standards. But because the sensors are to meet U.S emission standards, the car itself can be modified to ignore the sensor’s override and make the car believe it was in use. TFL motors was curious about the scam, so they decided to put a Jetta TDI turbo diesel on an AWD Dyno, to confuse the car into thinking it’s on the street, not being checked for emissions. Being in emissions mode, the AWD dyno lost horsepower and torque, but without the sensors active the car produced excess diesel exhaust, going over the EPA regulated limit. The car itself was able to perform at a higher level without the sensors active, proving reason to hide the fact that excess exhaust is produced. Certain companies realize the regulations hold their products back, so to promote the fuel efficiency and or horsepower of the car, they would gladly hide the fact that their cars are emitting excess diesel exhaust. Some ways to prevent excess exhaust would be to install EGR coolers, or to buy tuners for your engine’s valves. But many professional truckers tend to stick with rolling coal. “Rolling coal” can happen by making a smoke switch, or removing emission controls on truck models, and adding a tuner to produce fine smoke build ups. Diesel exhaust is actually less harmful then a

But was it ethical? This question will often be asked regarding the case of engineer James Liang and his role in the Volkswagen emission scandal. During the period of early 2006 to 2014, James Liang and his team of engineers developed a “defeat” device that allowed diesel powered vehicles to pass the EPA emission test, when in fact the vehicles were emitting up to 30 times the allowable limit. To many, this may seem a black and white case of ethics due to the fact that Liang’s team and Volkswagen blatantly cheated on a governmental testing regulation and then proceeded to falsely advertise the vehicles as “clean diesel and environmentally friendly” as reported by the United States Department of Justice; however, different ethical

As a multinational corporation, the implication of the scandal determines the fate of numerous stakeholders both internal and external. Internal stakeholders comprise of the board, managers and employees while external stakeholders subsume shareholders, customers and suppliers. The economic, political and social impacts of the dishonest practices would shape the fate of Volkswagen and affect the future prospects of the automotive industry. Common shareholders whilst not involved in the day to day running of the business placed faith and belief in the firm by providing capital had suffered severe economic loss as share prices (get something for stat). Despite the callous deception in advertising the defeat device displayed no signs of disturbing vehicle performance, however, customers of Volkswagen and its subsidiary vehicles suffer from lower resale value. In addition, even though the scandal was global, European consumers were the most affected with diesel cars accounting for 41% of all European cars (Fontaras, 2016). This high percentage in respect to other nations is a result of incentives provided by the European Union for the purchase of diesel vehicles such as subsidies towards the production process resulting in lower premiums compared to petrol counterparts (Vidal, 2015) In additional with sales falling suppliers of Volkswagen would likely lose future contracts or have current contracts downgraded as less parts are required. Thus, this loss of future

In September 2016, a breaking news that Volkswagen will face US $18 billion in fines attracts a lot of eyeballs. James Liang, an engineer who worked for Volkswagen for 30 years, was one of protagonists in this scandal. Liang helped to design a so-called “clean diesel”, which Liang and his team knew could not meet the stricter American emissions standards. However, to help vehicles equipped with this kind of engine to be able sold in the United States, they installed software that cut back on pollution during emissions testing. The number of affected cars sold is about 500,000. Liang has pleaded guilty to U.S. federal and would face up to five years in federal prison. This is not only

First, by drawing from Burki’s (2015) article on, I will discuss one of the main factors that gave rise to VW being able to falsify their emission tests and how it can be prevented in the future. Burki noted that the testing system

In today’s society we often come to many debates on several issues that go on in our world today. Recently there was an ethical debate on whether or not it is ethical to release vehicles with software that defeats emission testing by the EPA. Volkswagen is being accused of using illegal software designed to hide emissions during testing by installing cars with a software. The EPA accused Volkswagen of using the device in nearly over a half a million cars (Davenport). The cars are reportedly to have been installed with a software that had the ability to turn off the emissions controls when driving normally and turns them on when the vehicle is undergoing an emissions test. With all of these assumptions of Volkswagen cheating the emissions testing does that question their ethical corporate responsibility?

Volkswagen(VW), a classic and adored automaker who ruled the automotive manufacturing business for many decades suddenly found itself in the middle of the tragic business crisis with the news that they deliberately cheated on and falsified emission tests on many of their vehicles over the past several years. On September 15, 2015 VW was charged with allegations of manipulating US emission tests by installing cheating software by the US Environmental Protection Agency (EPA). In its response, VW admitted the charges which led the company to undergo a shakeup among its executives, a drop-in stock and resale values, government investigations, and a serious blow to their

No one likes to be swindled. Should the scenario changed, Volkswagen will be burning with anger when they found out that a reputable company which promotes low emissions was causing serious damages to people’s health and environmental.

With billions of dollars invested and hundreds of thousands of Americans employed (Department of Commerce, n.d.), the automobile industry has a vast influence in the United States. Since the time Henry Ford developed the assembly line production (Statista, n.d.) the industry has grown into a global market with no signs of slowing down. Top car companies are constantly searching for new innovations to set them apart from their competitors. Among those companies is Volkswagen (VW). A company which strides in emissions and fuel efficiency turned, not only to be false, but caused a severe amount of damage (Ewing, 2016).

 It wasn’t until the early 1970’s that car manufacturers saw a need to restrict the pollutants from their automobiles.  Thus came the advancements of new emission controlling components in the vehicles.  There was the catalytic converter which changed carbon dioxide into carbon monoxide, this change still resulted in pollution but significantly decreased the harm done.  Next came EGR which is Exhaust Gas Recirculation and forces unburned gas from the exhaust back into the engine making the car far more fuel efficient and environmentally friendly.  Unfortunately the next thing to follow was a serious toning down of the power of the engines.  The earlier thoughts were that bigger and more powerful were better, however these types of cars sent pollution caused by automobiles into an exponential growth.  The internal combustion engine vehicles that are on the road right now account for the vast majority of the air pollution around the world.  The electric vehicles, however, have zero emissions.  If this proposal is passed, then the condition of the urban airways will be

After the announcement of the emissions scandal, Volkswagen is fumbling to figure out how to pick up the broken pieces of its brand image. Volkswagen had ruined the trust of all of its stakeholders. The announcement of the cheated emissions test has crushed Volkswagen’s stock price by almost 20%, which implies an almost $27 billion loss in market value. This scandal required the recall of 11 million cars with an expected cost of over $25 billion in penalty fees and the cost to fix recalled vehicles. This scandal of much higher than stated emissions directly contradicted with Volkswagen’s branding of a clean emission diesel vehicle. It could not have gotten much counter-intuitive. Volkswagen has spent 45% of its television advertising budget directly focusing on Volkswagen’s products’ low emissions. That marketing budget is now valueless. However, most importantly, Volkswagen upset its customer base. The owners of these recalled vehicles not only feel lied to and betrayed, they have to take time to bring their recalled car in to get fixed. But, one of the biggest complaints is the loss of resale value totalling nearly $5000. This may disrupt repeat customers and

The Board took note of a lack of emphasis in the Marketing Plan on Volkswagen’s green technology, as this is one of the company’s greatest strengths. Volkswagen has made significant efforts to increase efficiency, and has created the world’s most fuel efficient 5-seat vehicle, the Polo. The Board emphasized the fact that green technology appeals to American consumers. The company has leveraged this in other parts of the world and has had success, and The Board felt strongly that by implementing the current Marketing Plan, the company would be missing out on highlighting an important aspect of the brand.