‘In my German words, we have totally screwed up.’ Speaking in New York on Monday to the assembled American press, Michael Horn, Head of Volkswagen America, could only be apologetic for the scale of the scandal that his company had presided over. As of Tuesday, Volkswagen has admitted to selling as many as 11 million diesel vehicles fitted with so-called ‘defeat devices’ designed to mislead US emissions testers. The American Environment Protection Agency (EPA) has found that this technology has been used to hide pollution levels released by certain Volkswagens as much as 40 times the American legal limit. As the British transport secretary, Patrick McLoughlin has called for an EU wide investigation into whether similar technology has been used in Europe to mislead the testers, Volkswagen faces fines of more than $18 billion in the US alone. When the scandal broke on Monday, Volkswagen shares lost as much as 17.1 per cent of their value. Europe’s largest automobile manufacturer faces a possibly fatal crisis and consumer confidence in the motor industry has been severely dented across the world.
Speaking on Tuesday in an emergency press statement, VW’s chief executive, Martin Winterkorn, put it bluntly that ‘manipulation at Volkswagen must never happen again’. Winterkorn reiterated the opinion that ‘the irregularities in diesel engines of our group contradict everything which Volkswagen stands for’. Yet, the fact that such a large manufacturer could integrate premeditated mechanisms for misrepresentation on so massive a scale suggests otherwise. For so large a programme of what Winterkorn describes as ‘manipulation’ to have taken effect, people very high up the command structure must have been complicit. Whatever Volkswagen has told the public it stands for in the past, this scandal has demonstrated a profound disrespect for its customer base deeply ingrained within the company.
When Horn told the American press that the scandal was ‘completely inconsistent with our core values’, he highlighted the gap that had developed between the ‘core values’ the company presented to its public and its shareholders. The rigging of emissions tests for certain diesel engines meant that Volkswagen could continue its narrative of being a producer of clean diesels for a clean future. By designing engines that could at times be economic with the truth about emissions, Volkswagen secured the lucrative position of one of the largest diesel manufacturer in the United States. At the expense of those people who were envisaged to be using and living around their products, Volkswagen secured a profit for its shareholders. The company’s rigging of the emissions tests meant that it could continue to supply a sub-standard engine to the American people. Beyond the ‘core values’ advertised in its showrooms, Volkswagen’s main motivation for this technology was greed. It was a misrepresentation that could save millions of dollars in expense developing less pollutant engines.
The wider problem is that this priority of profit over people, practice over ethos, is not confined to this company alone. Nobody yet knows how far this scandal will extend and how many other car manufacturers may or may not be found to have committed the same crimes. The share price of other European car makers has taken a battering in the last few days and, until further tests have been carried out, the market remains unsure as to whether Volkswagen is an isolated case. Recently, the public has been misled and, at times, cheated in scandals as variant as the 2013 horsemeat fiasco and the fixing of the London Interbank Offered Rate (LIBOR). Customers are beginning to realise that they are no longer making transactions in a market designed to cater for their needs, but rather the markets are selling customers ideas of the truth that are remote from reality. Misrepresentation has, in other words, become a symptom of how we do business in the twenty-first century.
Now that this has all happened, we need to ask ourselves how we should go forward from this. This scandal will, no doubt, rumble on for months, if not years, after this. The reputation of the EU’s biggest car manufacturer has been seriously, if not terminally, damaged, and the whole diesel motor industry has been thrown into ill-repute. As consumers, however, this fiasco should be seen as a chance to call for a re-conception of our relationships with manufacturers. We need to make sure that car manufacturers, like Volkswagen, are never again confident enough to deliberately cheat the public and expect to get away with it. We need to expose the widening gulfs between what companies describe as their ‘core values’ and the realities of their practice. Ultimately, we need to demand basic respect from the people that sell things for their clients: the general public.