Volkswagen had a major push to sell diesel cars in the US which was supported by a huge marketing campaign advertising their ‘low emission’ cars (Holtten,2015). The products that were advertised as ‘low emission’ cars by Volkswagen are the Audit A4, the Volkswagen models Jetta, Beetle, Golf and Passat (Holtten,2015). The campaign received attraction in late 2008 by a publication called, 'Green Car Journal' who compared the five finalists of its annual Green Car of the Year. Praise for the Volkswagen Jetta TDI was awarded due to its “ground-breaking clean diesel” (Smith and Perloff, 2016). By the year 2015, the company introduced the third generation of its Clean Diesel Cars which sold 33,000 cars (Fortune,2018). However, in September 2015, Volkswagen received a plethora of negative media coverage due to the US Environmental Protection Agency (EPA) who issued a notice of violation of the Clean Air Act to the Volkswagen Group (EPA,2019). The US EPA discover that 482,000 Volkswagen diesel cars in America were emitting up to forty times more toxic fumes than permitted (Topham et al.,2015). This violation was heightened in 2015 however, there have been incidents reported to Volkswagen in 1999 and 2000 regarding defective exhaust parts, causing excess carbon monoxide and nitrous oxide but, this was not reported to regulators (which is a requirement) (Fortune,2018). The excess volume of nitrous oxide poses a serious threat to the environment, as air pollution has contributed to 500,000 people dying prematurely in 2012 according to the European Environment Agency (Fortune,2018). In addition, diesel is the biggest source of nitrous oxide and the relationships with high emissions of the gas in correlation with health threats have been denied by Volkswagen.
The company has also been accused by the EPA of modifying the software of the 3-litre diesel engines fitted in some of the Porshe and Audi cars as well as Volkswagen models, such as the Volkswagen Golf (Holtten,2015). As the EPA found that the engines in Volkswagens cars had computer software that could sense test scenarios by monitoring speed, engine operation, air pressure and even the position of the steering wheel in laboratory conditions (Holtten,2015). The software can sense when the car was being tested and actively equip the vehicle to reduce emissions, which is how Volkswagen manipulated the tests (Gates et al.,2017).
Volkswagen has used two basic types of technology to reduce emissions of nitrogen oxide in its diesel products. This is achieved by trapping the pollutants when the system traps nitrogen oxide it reduces toxic emissions but, the engine must regularly use more fuel to allow this to occur. The SCR system placed in the Volkswagen cars could save fuel by allowing more pollutants to pass through the exhaust system. Saving fuel could be a reason why Volkswagen’s software could have altered the car to pollute more, according to researchers at the International Council on Clean Transport (Gates et al.,2017).
The actions which Volkswagen AG took in the first few months of the crisis to address widespread concerns.
A crisis is defined as threatened or tarnishing an organisations reputation (Coombs,2007; Cornelissen,2008) which can change how stakeholders interact with the organisation (Dowling,2002). The Volkswagen emissions crisis can be categorised as a reputational crisis (Coombs,2015) as defined by Sohn and Lariscy (2014), it involves irresponsible behaviour by management and corporate messages that offend some stakeholders, which can cause the perception of the organisation viewed less favourably.
Within the first few months of the outbreak of the Volkswagen crisis, the following activities occurred: a corporate apology, a change in senior management and changing the logo.
Volkswagen CEO Martine Winterkorn released a video apology addressing to customers, regulatory agencies and the public for Volkswagens misconduct (Groden,2015). Apologising to stakeholders for the organisation's actions is an appropriate response to a crisis, as victims/ potential victims should receive instructive instruction with an expression of sympathy (Coombs,2012). Adopting the CEO of Volkswagen as the spokesperson for the scandal arguably can be a persuasive tool. As an element of Aristotle’s Rhetoric, in particular, ethos is present. Having the CEO apologise to stakeholders for the organisation's actions arguably has a charismatic appeal (ethos) as the CEO can be viewed as a credible source to address the issue.
The organisation states that they are undergoing an internal investigation with government and regulation authorities. Volkswagen states that they have an “obligation towards our customers, our employees and the public” which is why they are abiding by undergoing investigations (Volkswagen,2015). It can be argued that Volkswagen has incorporated Image Repair Theory (Benoit,1995) as a response to the crisis. From a Public Relations perspective, image is argued to be a central concept that needs to be prioritised (Benoit,1995). The strategy adopted to repair the organisation's reputation arguably is correction action, as the organisation is seeking to overcome the crisis in the best interest for their stakeholders. It is important to meet stakeholders expectations as this factor can determine the reputation stakeholders have of the organisation (Watrick,1992) as they can influence the organisation's actions (Carroll and Buchholtz,2012).
However, in light of this apology, Volkswagen claimed that the increase of emissions in the cars was due to technical error and not deliberately illegal, therefore Martine Winterkorn blamed it on a small group of middle managers to underplay the severity of the issue (Garcia,2015). It can be argued that the strategy Volkswagen adopted in response to the crisis is, media framing which is a ‘central organising idea for news content that supplies a context and suggests what the issue is through the use of selection, emphasis, exclusion, and elaboration' (Tankard et al., 1991). It can be said, Accidental Cluster was used to frame the narrative as the crisis was blamed on a technical error.
After the apology, a change in senior management occurred, Martine Winterkorn resigned and said, “I am not aware of any wrongdoing on my part.” However, this statement contradicts internal documents including memos and emails stating the knowledge of the situation since May 2014 (Hakim, 2016). Here it can be said Martine Winterkorn framed the narrative and adopted the approach of denial posture, blaming the situation on a lack of knowledge.
Another action which the organisation underwent was rebranding, Volkswagen has eliminated its chrome-effect logo for a flat “digital-first” visual identity to mark the “start of a new era” in conjunction with the release of a line of fully electric cars (Hitti,2019). The new electric cars branded the ID.3 1st is similar, to Tesla’s Model 3 which can be said to be “the worlds’ fast mass-market elective vehicle”. Here it can be said Volkswagen’s strategy in response to the crisis is to change the narrative from the organisation being viewed as deceiving, to being highly competitive in the market. The topic of the change of narrative can be viewed as well suited for the company, as the culture internally focuses on ‘success at all costs’ (Fortune,2018).
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