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Volkswagen Emissions Defeat Device

Executive Summary
Volkswagen pulled one of the largest cases of false advertising in the history of the business
world. Their turbo diesel engines were advertised as being clean for the environment, as well as
gas efficient. For years Americans purchased these clean diesel engines placed in several
different models of Volkswagen vehicles without knowing each car was equipped with a defeat
device. This device altered the reading of the emissions when tested, so the cars are producing
emissions far past the legal limit. The first discovery of this device was in the United States, but
millions of cars around the world were discovered to be equipped with this device.
Volkswagens response was fit well into about three of the phase described in a scholarly article:
Ending the debate: crisis communication analysis of one universitys American Indian Athletic
Identity. The method used was split into four phases; the prodromal stage (arising clues that
imply a crisis in the near future), the acute stage (the crisis triggering incident), the chronic stage
(development of crisis and companys response), and the resolution stage (clear end of crisis).
Volkswagens crisis communication has followed this framework all the way up to the
resolution, because the Volkswagen crisis has yet to completely resolve for several reasons. With
several spending cuts and a few billion dollars Volkswagen is working to repair the trust of their
customers, as well as attempting at finding solutions to counter act the enormous amount of
pollution emitted.

Table Of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4&5
Results/Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,6&7
Conclusions/Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Works Cited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Introduction:
Background
In September of 2015 major car manufacturer Volkswagen recalled over one million diesel cars
after the discovery of their illegal defeat device, according to The Guardian. The diesel engines
were advertised to the public as clean diesel engines with good gas mileage and emissions
compliant to the environmental standards in the United States. This turned out to be too good to
be true after a defeat device was discovered, and known to be in almost 10 million cars around
the world. The device allowed the turbo diesel engines to have exceptional gas mileage while
producing a fake, but legal emission rating. The true emission ratings of these cars were far past
the legal level based on the EPAs standards.
Purpose
The purpose of this white paper is to analyze the Volkswagens crisis communication to the
public, as well as the effects of the crisis on the company.
Objectives:
1. Show how the initial crisis damaged Volkswagen as a company.
2. Analyze how the public perceived the crisis.
3. Analyze how the public responded to the crisis.
4. Show how Volkswagen responded to the crisis initially.
5. Analyze the publics perceptions of Volkswagen after the companys yearlong response.

Methods
No two crises are the same, but I found that the Volkswagen crisis fit well into the framework
found in the scholarly article Ending the debate: crisis communication analysis of one
universitys American Indian Athletic Identity. The framework shows how the crisis effects the
company overtime, as well as the companys public reputation. These are the phases of research
I applied.
Phases:
1. Prodromal Stage: Clues arise to forewarn of a coming crisis
2. Acute Stage: Crisis triggering event passes
3. Chronic Stage: Crisis continues to develop, and company responds
4. Resolution Stage: A clear signal shows the end of crisis.

Using several articles published by The Guardian I was able to research the stages of the
Volkswagen crisis and apply them to these phases. My research on the publics reaction is based
on these articles, and the digital comments left by the readers of The Guardian. The Volkswagen
crisis has been evolving for over a year, and has not quite reached a definite resolution.
Therefore, the fourth phrase of the framework is not completely applicable, but the majority of
the research fit quite well. By grouping and coding a small sample of the comments made by the
public on these articles, I was able to divide and analyze the response of Volkswagens
customers and the greater public.

Results/Discussions
The results of my research can be divided into each phase of the framework presented above.
Prodromal Stage: Clues arise to forewarn of an upcoming crisis.
In September of 2015, researchers in the United States of America discovered a defeat device
believed to be installed in almost 500,000 diesel engines across the country. The device allowed
these engines to produce almost 40 times the legal amount of emissions while continuing to
display an inaccurate, but legal emission rating when tested. This was not as much of a clue, but
this discovery in the United States was the spark that ignited the crisis into a worldwide issue.
This discover was just the eye of the storm because the large amounts of pollution produced by
the cars effects the entire world, not just Volkswagen owners. After Volkswagen was legally
liable to recall about 500,000 effected in the U.S, other nations around the world began to look
into the emissions being produced by these clean diesel engines
Acute Stage: The crisis triggering event
On September 22nd, 2015 The Guardian published an article with the title VW admits 11mn
cars have pollution cheating device. Many other news networks also reported on this topic, such
as CNBC. This admittance has become the center of my research for the acute stage, because the
crisis began to unfold at full force once the media was aware Volkswagen had been lying about
their emissions intentionally. The Chief executive of Volkswagen America, Robert Horn
explicitly states. . . Our company was dishonest, with the EPA and the California Air Resources
board, and with all of you and in my German words we have totally screwed up. This
explicate admittance of dishonesty in combination with the drastic fall in Volkswagens share
price shows to be the definition of the acute phase. After these events where revealed to be facts,
the company was at now at the stake of all the criticisms of the public and the media.

Response To VW Crisis (fall, 2015)

Blame Other Polluters

Legal Issue

Pollution /Environmental Conerns

Still Loyal to VW

Never buy a VW Again

After coding many comments based on multiple articles published by The Guardian, I was able
to create a pie chart to represent and compare some of the most common responses. I categorized
the comments into 5 different groups regarding the commenters opinion or reaction to the crisis.
As you can see, the distribution is somewhat equal between the people who are still loyal and
those who will never invest in a Volkswagen again. Surprisingly many people who responded to
these articles werent necessarily offended by the fact that Volkswagen lied to millions of their
customers, they were more concerned about the amount of pollution this scandal has produced.
Chronic Stage: The crisis continues to develop, and the company responds
This phase of the crisis is the one with the most duration, in fact it could even coincide with the
fourth phase. There are many events in this phase that express Volkswagens attempts at
satisfying the public after their obvious fault, but the crisis had some time to develop first.
Within one month sales of Volkswagens was banned in Switzerland and nations like France,
Italy, The UK, Australia, China, and Germany began investigations on the companys defeat
devices. Several of these countries halted the sales of the diesel engine cars, and many of them
recalling all of the effected cars in their nation. Volkswagens first action of response was an
750mn euro spending cut to contribute to the companys research in electric and sustainable
engines. This spending cut did not encourage a large response from the public, because this
seemed to be a way to cut corners after cleaning up their mistakes.
The crisis continues to incline as the general public becomes involved. As mentioned
previously, Volkswagens lie may have benefitted their customers superficially by providing
exceptional gas efficiency, but the harmful emissions that the cars produce is breathed in by
everyone; Volkswagen owner or not. Many questions began to arise as more and more models
were found to be equipped with this device. The many years passed without the knowledge of
this defeat device has allowed Volkswagen to add almost 1 million tons of excess pollution into
the air. The cars can be fixed, and the owners can be reimbursed, but unfortunately the damage
done to our planet cannot be reversed.
About one year after Volkswagens admittance NPR published an article describing the nearly
15-billion-dollar settlement that the company agreed to. The settlement requires Volkswagen to
begin buying back and repairing all of the effected cars in the United States. This aspect of the
settlement will cost the company about 10 billion, and the last 5 billion dollars will go straight to
environmental remediation.
This settlement seemed to satisfy most of the customers, but there is still a large amount of
people who believe Volkswagen was getting let off easy. On September 9th, 2016 The Guardian
released an article announcing the conviction of James Liang, who was charged with conspiracy.
He allegedly was the main engineer behind the entire scam, but the publics opinion didnt
necessarily agree.

Respone to VW Crisis (fall, 2016)

Blame Others

Legal Issue

Pollution/ Environmental Concerns

Still Loyal to VW

Never Buy a VW again

One year later the reactions of the public to Volkswagens crisis did not change drastically,
although the distribution is much more even. Many more people were concerned about who was
taking the blame for the crisis, and they many believed that many more people other than James
Liang should have been criminally charged for false advertising and environmental damage. The
ratio of people who still respect Volkswagen and the amount of people who dont are
surprisingly very even. There are many people who will forgive the company once the settlement
reaches the customer, and just as many people who will never look at the company the same. A
large portion of people compared the crisis to other car companies like GM, and their responses
to their own crisis. Many believe that Volkswagen is not the only company lying about
emissions.
Resolution Stage: A clear mark shows the end of the crisis.
This crisis has finished developing, but the clear end of it is not anywhere near in sight. It took
over a year for the company to respond with the 15-billion-dollar settlement, and that just
showed that the company was attempting to revive. Although the settlement has been approved,
it is very likely that it will take an additional year (or longer) to ensure that all of the customers
with the device installed to be reimbursed. There are also several investigations that are still open
and could potentially expose new findings. For all we know, there could be more models with
inaccurate emission readings. This scandal definitely damaged the publics trust towards
Volkswagen, and it has also ignited a suspicions towards many other car companies as well.

Conclusions/Recommendations
The Volkswagen crisis was a miraculous example of false advertising that tricked millions of
people for many years. The companys actions destroyed the credibility of the brand, and aslo


had an enormous impact on our environment. Although the companys sales have gone down
considerably in the past year, Volkswagen will likely survive this crisis. Their spending cuts for
research on electric motors, as well as their 15-billion-dollar settlement have showed that
Volkswagen is willing to pay for the damage that they have done. It is likely that the crisis will
reach a clear end once every single defat device is taken off the road, each customer is satisfied
with their reimbursement, and the, masterminds who profited millions are identified and
convicted. Although one man, Liang, has already been charged there is no way that he was the
only one to turn a blind eye to this scam. The public will be more satisfied when they see justice
served to each person who polluted our environment detrimentally just to make profits.

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Works Cited

Boston, William. "New Discovery Broadens VW Emissions-Cheating Crisis." WSJ. Wsj.com, 06

Nov. 2016. Web. 20 Nov. 2016.
Domonoske, Camila. "Judge Approves VW's $14.7 Billion Settlement Over Emissions Scandal."
NPR. NPR, 25 Oct. 2016. Web. 20 Nov. 2016.
Kollewe, Julia. "Volkswagen Emissions Scandal Timeline." The Guardian. Guardian News
and Media, 10 Dec. 2015. Web. 20 Nov. 2016.
Kasperkevic, Jana. "Volkswagen Engineer Pleads Guilty to Conspiracy in Emissions Scandal."
The Guardian. Guardian News and Media, 09 Sept. 2016. Web. 20 Nov. 2016.
Lhr, Julia. "Two-thirds of Germans Still Trust Volkswagen after Emissions Scandal." The
Guardian. Guardian News and Media, 20 Oct. 2015. Web. 20 Nov. 2016.
Ruddick, Graham, and Gwyn Topham. "VW to Recall 8.5m Diesel Cars across Europe." The
Guardian. Guardian News and Media, 15 Oct. 2015. Web. 20 Nov. 2016.
Roland, Daniel. "Germany Expands Diesel Probe to Include VW Board Chairman Hans Dieter
Poetsch." CBSNews. CBS Interactive, 15 Oct. 2015. Web. 20 Nov. 2016.
"Volkswagen Claims Chief Expects Most Car Owners to Accept Redress." The Guardian.
Guardian News and Media, 07 Feb. 2016. Web. 20 Nov. 2016.
Morgan, Simon. "VW Admits 11mn Cars Have Pollution Cheating Device." The M&G Online.
N.p., 22 Sept. 2015. Web. 20 Nov. 2016.