Volkswagen Emission Scandal Summary

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 Volkswagen (VW) corporation experienced a major scandal after it conspired to manipulate data for diesel emissions. Business ethics, legal issues, and a Biblical worldview are common areas of failure and are clearly present in this case. Lippe (2015) stated that these acts were deliberate and examined the responsibility of legal counsel to mitigate such acts. If not for road testing by engineer, John German, excess emissions may not have been detected, and due to outcry, VW admitted to their technologically sophisticated fraud (Patra, 2016). God’s Word reveals, “But there is nothing covered up that will not be revealed, and hidden that will not be known” (Luke 12:2 New American Standard

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

The company had a lot of pressure to get their diesel vehicles on the road which were advertised as having low emissions and being overall better for the environment. Volkswagen created a ‘defeat device’ which allowed them to cheat their way through the emissions test and get their vehicles on the road quickly without having to address the issue. When they were caught, the company admitted to having over 11 million cars world-wide containing this device and were releasing emissions up to 40 times the legal limit in the United States. Volkswagen planned on recalling some of the vehicles privately before the scandal was revealed, but once it was found out, all the cars were reimbursed but the company also had to pay fines for each car that violated the standards (Hotten, 2015). While the company did experience quite a financial loss as a result of this large-scale scandal, no individual people were punished or convicted of anything due to the fact that it is nearly impossible to pinpoint who is at fault. Due to the fact that they are a large, relatively wealthy company, they figured it would be easy for them to get away with what they did, because of the way white-collar crimes are approached by the criminal justice system. Had a company or individual of lower economic status tried to attempt a similar crime, the punishments would have been more severe and individual persons would have been picked out and punished for the crimes committed, likely resulting in job loss or

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

The devised code of ethics plays a vital role in the deciding factor for the engineers. Thus, in the case of the Gee-Whiz Mark 2 (GWM2) having evidence that 25,000 units are not compliant with safety standards in North America or Europe shows that the public's security is in jeopardy. Complying to the first fundamental canon of the NSPE code of ethics for engineers states that, "engineers shall hold paramount the safety, health, and welfare of the public”. Sadly to say, the current products only put users at a much higher risk of electrocution and death. Thus, by the virtue of the fundamental canon, engineers at Gee-Whiz Mark 2 morally cannot distribute detrimental products to the public in any geographic location, even if the law permits. Taking Toyota Motors in 2009 as an example, where more than 680,000 vehicles were recalled in the United States alone, due to safety concerns of the airbags and the brake lights being defective (Valdes-Dapena, 2012 ). Even though this company could have disregarded the issue and continue to sell defective machines, they instead did what was morally right for the citizens and recalled the products. A product recall of thousands of units is not easy for any company, resulting in a multi-billion financial loss and the expenditure of sales time. Nonetheless, when someone’s life is at stake there is no choice but to resolve the emerged problem, no matter the loss that will be incurred by the

Volkswagon was caught cheating on their diesel emissions by a man named Daniel Carder and his small research team at West Virginia University in late 2012 through May 2013. The team consisted of a research professor, two graduate students, a faculty member and himself. Their team originally wanted to investigate emissions to help the diesel cars in Europe. There has been much data suggesting vehicles in Europe have high nitrogen oxides and dioxides. The goal was to look at emissions in the U.S. where the emission standards were very strict. It was thought that if the cars were found to be clean, then they could take the data results to Europe, and say “why can’t you do the same in Europe?” The small research team had been granted $50,000

Loss of reputation and sales; fines for VW → loss of status and being made responsible for the scandal

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

Some engineers would have buried the design flaw. Instead, LeMessurier set out to confirm the student’s suspicions, confirmed the findings, and set-out to find a solution. Ethics in engineering signify are necessary to leadership since the consequences can be so high.

Volkswagen wants to become a global and environmental leader in the automotive world and has developed the “Strategy 2018”. The “Strategy 2018” is stated in their latest annual report in the goals and strategies section as follows:

The people at the West Virginia had tested vehicles as well as the EPA (Patel). Volkswagen chose to include rout programming device to cheat the system to pass the testing laws. Volkswagen as a corporation was basically trying to cut the cost of engines to be built by limiting the NOx emission system that controls how much dirty chemicals that goes into the air (Patel).By the company putting this device in their cars they were trying to cut down the cost that they would have to spend, at the same time Volkswagen cars had better performance. The ethical question would be is it really worth it to CHOSE to overlook the laws to save money on cash (Patel). "We expected better from Volkswagen," said Cynthia Giles, the E.P.A's. colleague manager for the Office of Enforcement and Compliance. She called the automaker's activities "a danger to general health of our

It is not hard to see that the scandal would cause a horrid blow to VW’s image. Until the incident, VW had, like many other German companies, the reputation of “German engineering” (Robertson, 2013). However, instead of using that innovation to develop diesel-fueled cars compliant with U.S. standards, it decided to try to scam its way in the market. Not only did the company admit to having 11 million cars with software intended to cheat tests (Gates, Ewing, Russell & Watkins, 2017), it also plead guilty to “destroying evidence in an elaborate cover-up” (VW Admits Emissions Cheating and Cover-up, 2017); building further distrust among its consumers.

With the rise of globalization and the complex dynamics of the global business environments, organizations are tackling and forced to deal with large ethical issues on a daily basis. The ramifications for an organization that does not handle an ethical scenario efficiently and effectively could put the entire company and organization at dire risk. Organizations put their company brand and identity on the line with their everyday decisions and how they choose to operate themselves and their business. Many companies will do anything to keep their image or façade in good graces with the public and try to cover up or hide the mistakes with hope that their mishap or fault will never be exposed. The auto industry has had its fair share of

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