The Volkswagen fuel emissions scandal raises questions about:
- The monetary value of a company’s reputation
- How to right corporate wrongs
News headlines begin to reveal some of the answers.
Martin Winkerton Resigns as Volkswagen CEO
How Many Billions Will Volkswagen Have to Pay?
Volkswagen’s Deception Could Exceed $100 Million in Health Damages
What Did Volkswagen Do Wrong?
Volkswagen leaders and employees intentionally deceived customers. They also deceived regulatory agencies that protect our health and the environment that sustains our health. They created this lie by intentionally rigging software to produce false data about diesel engine fuel emissions.
When they got caught in this lie by U.S. regulatory agencies, Martin Winkerton, VW’s now ex-CEO, and his minions, continued to lie. They lied until they couldn’t get away with it any longer.
VW’s new CEO, Matthias Mueller, has set aside $8,000,000,000 to cover the costs of law suits, recalls and repairs. Apparently that won’t be enough. As of January, 2016 the U.S. government is suing VW for more than $20 billion.
And that is just the beginning. Volkswagen’s reputation is in tatters, and at least 650 class action suits had been filed in the U.S. alone.
What Should VW do to Right Corporate Wrongs
VW will recall some 8.5 million affected vehicles in Europe.
According to a January 2016 article, VW is a long way from reaching an agreement with US authorities on a program to rectify the problem.
This same article states:
In the worst-case scenario, VW may be forced to buy back all 600,000 affected cars in the United States.
In my rarely humble opinion, that worst case scenario is their best case scenario. It is exactly what VW executives should do to right corporate wrongs. And they should do it now.
VW’s CEO should lead the charge to offer owners the pre-scandal monetary value of affected vehicles. (VW car values plunged when the scandal broke.)The offer should include an option to credit the buy back amount towards a brand spanking new, TRUTH TELLING VW. Furthermore, the vehicles will be sold at a price that includes zero profit to VW.
Predicted Benefits:
- Brand loyalty and reputation repair
- Many current VW owners will be delighted with, and take advantage of, the offer
- Many of them will continue to be, or will become, VW loyalists
- They will become word of mouth marketers and brand ambassadors
- Media coverage about the program, and delighted customers, will reflect well on the company
- VW will become known as THE COMPANY that righted corporate wrongs. A singular fallen hero, among the heap of fallen heroes, turns real hero
- The high polluting cars, along with their negative health and environmental impacts, will be off the road
- Many costly class action suits, that do absolutely nothing to right corporate wrongs, restore reputation and credibility, or satisfy customers, will disappear
To right the corporate wrongs related to health and environmental damages VW might consider sizable contributions to:
- Environmental causes
- Research to treat asthma, emphysema and other diseases related to environmental factors
- Research to lower and/or eliminate environmentally harmful auto emissions