NEW YORK CITY (Sept. 30, 2015) — The U.S. Environmental Protection Agency (EPA) on Sept. 18 accused Volkswagen A.G. of installing a device in its diesel engine vehicles that defeats its emission control technology unless it recognizes that the vehicle is going through an emissions test.
This isn't the first time an auto maker has installed what's called an emissions “defeat device” in its vehicles. As our cars become more like our computers it won't be the last time.
And that's the thing about VW's defeat device. It's not a device, it's software. They were able to hide the true emissions from the EPA because the agency tests cars on treadmill-like platforms called dynamometers, not in real driving conditions. The software recognized the speed, steering wheel position, air pressure, and several other factors to determine an emissions test was taking place. It then turned on pollution controls that reduced the output of nitrogen oxides that contribute to smog and other pollution.
The initial number of vehicles that would be part of the recall was about 500,000. Then, as the news began to break globally that number skyrocketed to over 11 million vehicles. That number rivals some of the other largest recalls in history.
From a negative publicity standpoint, Volkswagen has been “lucky,” so to speak, here in the U.S., with Pope Francis' visit, John Boehner's resignation, and the usual mélange of news from Apple Inc., Donald Trump and the Kardashians have provided a little news cycle air cover over the last few weeks.
Scouring the coverage for VW's response to this crisis clearly shows they've, ahem, “circled the Volkswagens,” doing as little talking as possible. Former CEO, Martin Winterkorn, resigned within five days of the news breaking, saying: “I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.”
This is the first dissection of VW's crisis communications strategy: If a company is going to lose its top executive, there is an opportunity to take some of the momentum out of the story by having the CEO accept more responsibility. In this case, Mr. Winterkorn's “I am not aware of any wrongdoing on my part” leaves the auto maker with more exposure than if he had accepted more of the blame.
Given the global footprint of this auto maker, there are stories appearing all over the world — with numerous reporters taking very different angles. There are those who are covering the software manipulation and technology angle, while others are looking at the financials, including Sept. 22 when VW's stock price plunged 17 percent. The automotive press is talking about how this might increase the EPA's scrutiny of all auto manufacturers' emissions, and lastly there are reporters looking into VW's culture in an attempt to find out if this cheating is borne from the way VW does business.
The fact is, VW is under siege:
- By governments and reporters around the world. The U.S., Germany, the UK, Switzerland, Italy, France, South Korea, Canada, Norway and India have all begun calling for investigations into the rigging-scandal.
- By their shareholders. The company's stock price has continued to fall this week after last week's plunge.
- By their customers. When the software defeat is engaged the vehicles lose horsepower and fuel efficiency. The customers aren't getting what they paid for, and they've filed dozens of class-action lawsuits.
- And lastly by public opinion.
Right now, the German car maker is losing on all fronts.
Dissection No. 2: VW officials aren't communicating enough. They issued only a handful of official statements and several quotes have found their way into the press with some regularity. Two of them were by Mr. Winterkorn. It's strikingly obvious they do not have a crisis communications plan in place. There haven't been any third parties coming to VW's defense. Even with VW's close ties to the German government, the only message from German Chancellor Angela Merkel is a call she made for “Full Transparency.”
David Ogilvy, the legendary advertising executive, famously said: “Hope is not a strategy.”
This week the world's largest media market is going to resume normal operations once the pope has left the building. VW can hope Donald Trump comes out with one of his famously bigoted sound bites, or that Kim and Kanye file for divorce. But with a new CEO at the helm of VW, it's time to start talking to the press and making some definitive, and continuous, announcements about how this is going to be investigated and what measures will be put in place to ensure this doesn't happen again.
Dissection No. 3: There are stories in the press suggesting that because Volkswagen is the parent company to 12 brands, and that many of them are built on shared platforms, that VW has also said 2.1 million Audi vehicles are equipped with the tainted software. Other stories have suggested the scandal might reach into Porsche and even into the high-end luxury divisions of Bentley and Bugatti.
They need to contain this story to diesel engines in the VW family and to the Audi vehicles already disclosed — if indeed they know this is the truth.
I'll end this by dispensing some free advice, fully understanding it has not been requested and it's among a thousand or so opinions on what VW should do.
Nevertheless, I'll start by saying that with new CEO Matthias Mueller, there is an opportunity to immediately begin shifting the narrative from how big and bad this all is — which to be clear, is a catastrophe for VW — to what he's going to do about it.
- Announce an immediate, and sizable, contribution to numerous environmental organizations all over the world, prioritized by VW's biggest markets.
- Forge and announce partnerships with national parks all over the world. Have VW employees volunteer time tending to the maintenance of various national parks.
- Arguably, the most important thing to do is announce the plan for a) finding out how this happened (the public wants a name!) and b) how VW is going to change so this never happens again.
- Find advocates to begin telling different stories. Have those third parties start with comparisons to other industries that have polluted much more, and in much worse ways. Talk about the financial impact a devastated VW will have all over the world where manufacturing, sales and engineering take place. And above all that, have them talk about all the good VW has done, the charitable giving, the employment and revitalization of towns and cities all over the world.
- The VW Group's website has plenty of releases, quotes and information coming from members of the board that the media is not picking up. Do more press outreach. Make board members and senior executives available to the media.
None of this is going to fix the issue. VW executives cannot communicate their way out of this. At the heart of it is a group of people who apparently care more about a vehicle's performance than pollution. That, for sure, needs to change. But while VW tries to figure out how to fix this problem, they could really use a break in the negative news coverage.
There is a long and bumpy road ahead of Volkswagen. And for the time being their slogan should become “communications wanted,” because so far it's been a media feeding frenzy, with outlet after outlet investigating a unique angle to this story.
Sadly for VW, they're not one of the outlets. They really need to start talking.
Alex Flores is vice president of communications at Global Strategy Group (GSG), a public affairs firm in New York City. He has 20 years of experience in advertising and digital communications. Before joining GSG, Mr. Flores worked in automotive marketing and managed a book of business that included Cadillac, Nissan, Infiniti, and Ferrari. He wrote this blog for Automotive News, a Detroit-based sister publication of Tire Business.