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Wolkswagen Research

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Volkswagen Research
“The Volkswagen emissions scandal explained” http://www.theguardian.com/business/ng-interactive/2015/sep/23/volkswagen-emissions-scandal-explained-diesel-cars * “Volkswagen has been cheating in emission tests by making its cars appear far less polluting than they are. The US Environmental Protection Agency discovered that 482,000 VW diesel cars on American roads were emitting up to 40 times more toxic fumes than permitted - and VW has since admitted the cheat affects 11m cars worldwide.” * “…far more harmful NOx emissions, including nitrogen dioxide, have been pumped into the air than was thought – on one analysis, between 250,000 to 1m extra tonnes every year. The hidden damage from these VW vehicles could equate to all of the UK’s NOx emissions from all power stations, vehicles, industry and agriculture.” * “VW’s “defeat device” is not a physical device but a programme in the engine software that lets the car perceive if it is being driven under test conditions - and only then pull out all the anti-pollution stops.” * ““Clean diesel” engines cut emissions through techniques such as adjusting air-fuel ratios and exhaust flows, and in some (though not most VWs) injecting a urea-based solution to render NOx harmless. When running normally, requiring greater performance, VW’s controls would not operate in the same way.” * “How does the defeat device know it's being tested? The EPA tests have known practices and profiles. In many cases, the test vehicles are put on rollers and run at a certain speed for a certain time, then at another known speed for another known period. The car's central computer can detect whether inputs match those expected in test conditions.”

* “What does it mean for your health? The fumes can cause inflammation of the airways and worsen breathing for anyone. But NOx emissions can also react with other compounds to cause more serious respiratory conditions and aggravate heart problems. Long-term exposure to the pollution hastens death: research this year linked high levels of NOx to 9,500 premature deaths annually in London alone.”
“Problems at Volkswagen Start in the Boardroom” http://www.nytimes.com/2015/09/25/business/international/problems-at-volkswagen-start-in-the-boardroom.html?mwrsm=email&_r=0 * …”world’s largest automaker by sales — 202.5 billion euros last year” * ““The governance of Volkswagen was a breeding ground for scandal,” said Charles M. Elson, professor of finance and director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “It was an accident waiting to happen.”” * “The company, founded by the Nazis before World War II, is governed through an unusual hybrid of family control, government ownership and labor influence.” * “Volkswagen’s recent history — a decades-long feud within the controlling Porsche family, a convoluted takeover battle and a boardroom coup — has dominated the German financial pages and tabloids alike.” * “Porsche and Piëch family members own over half the voting shares and vote them as a bloc under a family agreement. Labor representatives hold three of the five seats on the powerful executive committee, and half the board seats are held by union officials and labor.” * “Outside views rarely penetrate. “It’s an echo chamber,” Professor Elson said.” * “…where Volkswagen is based in Lower Saxony and the city with the highest per capita income in Germany, is even more remote and isolated than Detroit was in its heyday. “The entire economy is automotive,” he said. “People have a completely uncritical view of cars and their impact on the environment because they all make a living from the industry.”” * “Volkswagen is seen as having a national mission to provide employment to the German people. That’s behind the push to be No. 1 in the world. They’ll look the other way about anything.”” * “Volkswagen said it employed nearly 600,000 people last year to produce about 10 million vehicles. By comparison, No. 2 Toyota employed 340,000 to produce just under nine million vehicles.” * “The problem, Professor Elson emphasized, is that maximizing employment shouldn’t be a primary goal of a board, whose purpose is to monitor management for a company’s investors and ensure the long-term health and profitability of a company.” * “In this regard, Volkswagen is similar to other large companies in Germany, which, under a policy known as co-determination, or Mitbestimmung, requires company boards to be equally divided between workers and members elected by shareholders.” * “The Volkswagen board has been especially slow to move on environmental issues, investing less in electric and hybrid engine technology than industry leaders.” * ““There’s an attitude among the German public that it’s very unfair for the U.S. to target the auto industry over emissions,” Professor Roth said. “If you have electric cars and a coal-fired plant producing the electricity, you gain nothing.”” * “Considering the damage to Volkswagen from the still-unfolding scandal, its attitudes and approach to governance may have to change. Volkswagen faces a staggering number of investigations and lawsuits. Volkswagen said it set aside $7.3 billion, which doesn’t seem nearly enough; legal fees are likely to run into the billions, and the Environmental Protection Agency alone could fine the company up to $18 billion. It also has to figure out how to recall the 11 million affected cars, since it still isn’t clear how the company can remove the software and meet emissions standards without compromising automotive performance.” * “Volkswagen shares were trading at about €160, or $180, last Friday before the Environmental Protection Agency announced its investigation. They have dropped about 30 percent in the days after the news broke, wiping out over $26 billion in shareholder value.”
“Volkswagen’s Villains: Don’t blame rogue managers for the company’s emissions scandal. Blame a corrosive corporate culture and the dynasty that shaped it.” http://www.slate.com/articles/technology/bitwise/2015/10/volkswagen_s_emissions_scandal_has_a_villain_and_it_s_the_not_the_people.html * “But if the scandal has its villainous mastermind, someone who was powerful and involved enough to be responsible—indirectly, at least—it is most likely Ferdinand Piech, the grandson of Ferdinand Porsche and a powerful member of the Porsche clan that controls Porsche and VW.” * “Until this spring, Piech chaired the Volkswagen Group’s board, and several of his hand-selected executives are at the heart of the affair.” * “…the opaque, dynastic ownership structure of VW, which allows for almost no outside shareholder input.” * “…he presided over the culture that allowed them to be installed. With his reputation for tightly controlling Volkswagen’s operations and carefully shaping its executive ranks, Piech owns the company’s successes over the last 20 years. He ought to own this scandal too.” * “The EPA didn’t nail the exact culprit on its own; the independent International Council on Clean Transportation conducted independent on-road tests in 2013 that revealed the huge emissions discrepancies, and only then did the EPA act. At first VW stonewalled regulators, but the evidence was undeniable, even if unbelievable.” * ““Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group. I am doing this in the interests of the company even though I am not aware of any wrongdoing on my part.” Yet Winterkorn doesn’t claim he was unaware of wrongdoing in the statement. That doesn’t seem like an accidental omission. “ * “Even if Piech didn’t know about the scandal, his draconian management style, close selection of executives, and shuttering of dissent clearly enabled the conditions that allowed for such gross malfeasance. If VW executives greenlit the defeat devices without Piech’s knowledge, they may well have done so to stay in his favor.”
“The Other Victims of the Volkswagen Scandal: Dealers” http://www.nytimes.com/2015/10/01/business/the-other-victims-of-the-volkswagen-scandal-dealers.html * “The recent Volkswagen scandal has not only angered many of its customers, it is also threatening the prospects of hundreds of dealerships around the country that are anxious to learn how to fix diesel cars that intentionally thwart emissions tests.” * “…the dealers are on the front line of a controversy that has tarnished the carmaker’s reputation and could undermine sales. It is a new strain in what was already a tense relationship between dealers and the parent company.” * ““We have been suffering from an outdated product cycle, overpriced product and a deteriorating relationship between the dealer body and Volkswagen for a number of years.”” * “Car dealers are also stuck with hundreds of diesel-engine cars on their lots that they can no longer sell until Volkswagen fixes the emission problem.” * “Three days after admitting to its deception, Volkswagen told its dealers that it would provide financial guarantees and extra bonuses to “stabilize your profitability in the near term.”” * “As part of its financial support, Volkswagen said it would offer to reimburse dealers for the cost of holding on to diesel cars affected by the sale freeze until repair instructions were released. The company will also pay dealers $300 for any new gasoline-powered car they sell, $600 for Passat models and will guarantee extra bonus compensations for dealers for cars sold in the third and fourth quarter this year.” * “Despite the scandal, dealers have praised Mr. Horn’s leadership, saying he had repaired the trust between dealers and Volkswagen. Mr. Brown, of the Dealer Advisory Council, added that unless Mr. Horn was directly implicated in the fraud, his removal as the top American executive “would be nothing short of catastrophic to our market and our relationship.”” * “(The company said last week it would keep Mr. Horn as the head of its business in the United States. On Tuesday, the company named a company veteran, Winfried Vahland, the chief executive of Skoda, a Czech subsidiary, to a new board-level position overseeing all of its North American operations.)” * “There is no playbook for how to move forward for Volkswagen. While recalls are common, they generally involve a safety problem that must be addressed, not a ploy to foil regulators.” * “Steve Wilhite, a former marketing executive at Volkswagen in the 1990s, said the company needed to take quick steps to protect dealers. He suggested that the company should offer to buy back diesel-power cars from customers at the full retail value before news of the diesel scandal broke and then sell them back to dealers at a discount to their wholesale value.”
“Wide range of cars emit more pollution in realistic driving tests, data shows” http://www.theguardian.com/environment/2015/sep/30/wide-range-of-cars-emit-more-pollution-in-real-driving-conditions-tests-show * “New diesel cars from Renault, Nissan, Hyundai, Citroen, Fiat, Volvo and other manufacturers have been found to emit substantially higher levels of pollution when tested in more realistic driving conditions, according to new data…” * “…some of the diesel cars it examined released over 10 times more NOx than revealed by existing EU tests, using an alternative standard due to be introduced later this decade.” * “…second, UN-developed test (WLTC) which, while still lab-based, is longer and is believed to better represent real driving conditions. The WLTC is currently due to be introduced by the EU in 2017.” * “The controversy over high nitrogen oxides (NOx) emissions from diesel cars was sparked when Volkswagen, then its Audi and Skoda brands, were caught using software in millions of cars to cheat pollution tests. There is no suggestion of cheating in Adac’s analysis, but only a quarter of the 79 different cars ADAC tested using the WLTC standard matched their official performance on the existing EU test.” * “Peter Mock, one of the team at the International Council on Clean Transportation who exposed the VW diesel scandal, said the Adac test centre was “absolutely trustworthy”.” * “But Mock said the high profile now being given to the issue of misleading emissions data left him with mixed feelings. “I feel happy, but I also feel sad because there was enough data and people knew for a long time. The emissions in cities have not gone down like we expected and they could have been reduced a long time ago.”” * “Emissions experts have warned for some time that there were problems with official lab-based NOx tests, meaning there was a failure to limit on-the-road emissions. “Gaming and optimising the test is ubiquitous across the industry,” said Greg Archer, an emissions expert at Transport & Environment.”
“Porsche Names New CEO in Wake of VW Emissions Scandal” http://www.autoguide.com/auto-news/2015/09/porsche-names-new-ceo-in-wake-of-vw-emissions-scandal.html * “Porsche’s current head of production and logistics, Oliver Blume, has been named the new CEO of the company effective October 1, 2015.” * “Volkswagen’s top brass have been playing a game of musical chairs ever since Dr. Martin Winterkorn resigned his post as CEO of Volkswagen amidst the diesel emissions scandal. He was then replaced with Matthias Mueller, who left his post as the head of Porsche. Blume is also a former manager at Audi.” * “In the aftermath of the scandal, Porsche also lost its global sales boss Bernhard Maier, who was tapped to run VW’s Czech subsidiary Skoda, after that divison’s boss was moved to a new post overseeing North America. On top of that, Porsche’s current North American Boss, Detlev von Platen, will replace Maier.”
“VW revs up recall plan, hunts for culprits in pollution scam” http://news.yahoo.com/vw-says-1-8-mn-commercial-vehicles-emission-092856765.html * “Following the departure of chief executive Martin Winterkorn and sales chief Christian Klingler in VW's deepest-ever crisis, more heads looked set to roll after new CEO Matthias Mueller vowed to be "ruthless" in investigating the affair.” * “The steering committee of the carmaker's supervisory board met on Wednesday to discuss the preliminary findings of an internal probe into a scam that has rocked the automobile sector and wiped 29 billion euros ($32.5 billion) off VW's market capitalisation.” * “Supervisory board member Olaf Lies said "those people who allowed this to happen, or who made the decision to install this software -- they acted criminally. They must take personal responsibility".” * “Regulatory and legal probes are underway in several countries to find out who knew what and when, and German prosecutors have also launched an investigation against 68-year-old Winterkorn.” * “"Poetsch's possible nomination as new supervisory board chief is looking increasingly questionable,"…” * “The suspect diesel engines went on sale in 2009, which suggested the pollution-cheating software must have been under discussion within the company as early as 2007 and 2008, the daily Sueddeutsche Zeitung wrote.” * “Volkswagen, the world's biggest carmaker by sales, has admitted that up to 11 million diesel cars worldwide are fitted with devices that can switch on pollution controls when they detect the car is undergoing testing.” * “They then switch off the controls when the car is on the road, allowing it to spew out harmful levels of emissions.” * “The German government has given VW until October 7 to explain how it will resolve the scandal.” * “Germany's Federal Transport Authority KBA threatened to withdraw domestic road approval for VW models if the carmaker did not come up with the recall plan by next week.” * “VW has said owners of the affected cars would be notified "in the next weeks and months," adding that "all the brands concerned are going to create Internet pages where clients will be able to follow developments". * “The consumer protection group Deutsche Umwelthilfe said the entire European car industry was involved. "It's not just a 'Volkswagen-gate,' it's not just an affair affecting the whole of German industry. We have here fraud organised at a European level," claimed the organisation's chief, Juergen Resch.”
“Car Industry Accused of "Predatory Lobbyism"” (2005) http://www.dw.com/en/car-industry-accused-of-predatory-lobbyism/a-1457714 * “While lobbying to influence governmental policy is standard practice the world over, there is mounting concern in Germany that it may be adversely affecting politicians’ freedom to make the right decisions.” * “This week German environmental group "Deutsche Umwelthilfe" released a statement charging the German automobile industry with what it calls “predator lobbyism” -- attacking and killing new regulatory laws from the inside before they have a chance to take effect.” * “…with prominent politicians on the payroll of large automotive companies, stricter laws enforcing better emissions filters and lower horsepower motors have no chance in German parliament. * “There is a list of up to 100 persons in different parliaments, on several levels, on state level, on regional level, being paid by carmaker Volkswagen," Resch said. "For example the mayor of Wolfsburg, the city where Volkswagen is situated, gets a salary by this company."” * “Volkswagen has also had its hand in watering down recent legislation for higher environmental standards proposed by the Green Party, which would have required fine particle dust filters in diesel motors.” * “All it took, Resch said, was a letter from Volkswagen head Bernd Pischetsrieder to members of parliament.” * “…time of intense debate in the country about whether politicians should be allowed to hold down a normal job while carrying out their duties as an elected member of parliament or whether that would inevitably lead to a conflict of interests and turn parliamentarians into mere lobbyist for industry.” * “Under German law, parliamentarians are indeed allowed to work "on the side" as long as they do not earn more than €3,000 a month or €18,000 a year on top of their salaries as a member of parliament.” * “Volkswagen has already announced that it plans to release a list of employees on its books who also hold a political office.” * “However, Deutsche Umwelthilfe claims that the dilution of climate-friendly laws through the nexus of politicians and car industry officials is not only harmful to the German environment, but may hurt the economy in the long run as well.” * “Countries like China and Japan have lowered the ceilings for acceptable fuel consumption in automobiles, and even the US has stricter emissions standards than Germany. Many German luxury cars do not meet the new guidelines. Jürgen Resch warns that “made in Germany” may lose its selling power abroad.”” * ““Earlier German cars stood for high quality, for security, and for a while, even for high environmental standards," Resch said. "But, we're now noticing that even in the United States, more and more cars are not being able to sell, because the emissions are too high. We see a big danger if the very high priced cars in Germany can’t be sold in the whole Asian market anymore because of environmental regulations."”
“Here’s some welcome news for Volkswagen” http://fortune.com/2015/09/30/volkswagen-lawsuits-emissions/ * “A loophole in the 1970 Clean Air Act that absolves carmakers from criminal penalties means the Justice Department faces problems with jurisdiction when it comes to charging automakers with breaking pollution laws, according to the Wall Street Journal.” * “prosecutors now are considering alternate legal approaches, such as charging Volkswagen with lying to regulators, the Journal reported.”
“Volkswagen Emissions Scandal: Refit Plan Revealed For 11 Million Vehicles” http://www.hngn.com/articles/135015/20150930/volkswagen-emissions-scandal-refit-plan-revealed-11-million-vehicles.htm * “Volkswagen announced Tuesday that it will be repairing up to 11 million vehicles in an attempt to salvage its damaged reputation following its recent emission scandal.” * “Newly-appointed CEO Matthias Müller… stated that a project team has put together "a comprehensive action plan" over the weekend. He further stated that the company will soon be informing affected customers about how they can have their vehicles refitted…” * “Analysts have projected that the refitting of the affected vehicles may cost the company an additional $6.5 billion.” * “It was also revealed recently that 2.1 million Audi vehicles are equipped with the controversial defeat device that lowers the cars' emission levels during road tests.”
“Volkswagen Emissions Scandal: Audi Confirms 2.1 Million Cars Equipped With Controversial Defeat Device” http://www.hngn.com/articles/134460/20150929/volkswagen-emissions-scandal-audi-confirms-2-1-million-cars-equipped.htm * “…Audi has announced that 2.1 million of its cars sold in Europe, U.S.A. and Canada were equipped with the controversial defeat device, a software program designed to lower the vehicle's actual emissions when it is being tested.” * “…more than 2 million of them were sold in Europe, while about 13,000 were sold in the U.S. and Canada.”
“Volkswagen, its software and the psychology of cheating” http://www.ft.com/cms/s/0/1eeed486-669f-11e5-97d0-1456a776a4f5.html#axzz3nKq1F1FM * “Most corporate scandals follow one of three patterns. The first is that the law is unclear. Many have been testing its boundaries, and those who are finally blamed, fired or jailed either went too far or were selected by prosecutors or regulators to be made examples of.” * “Some, but not all, accounting scandals fall into this category too. Accounting is not an exact science and clients may be desperate for a slight extension of what the auditor accepted last year. The stretching goes on until the company collapses and the auditors are, humiliatingly, fined.” * “The second category of scandal is where the miscreant company sells customers something that does not help them, or hurts them. The company doing the selling rationalises that it is really up to the customer to decide whether they want to buy it or not. Some of the financial service mis-selling fell into this category, although some involved outright deception.” * “The third category of scandal occurs because “everyone is doing it” and your company will suffer if you do not. This covers everything from possibly legal but reputation-damaging manoeuvres such as routing profits through low-tax jurisdictions to crass immorality such as covering up adverse drugs trials and criminal activities such as Libor-rigging and bribe-paying.” * “There are few outright crooks in business. Most people who end up doing wrong drift into it. They push the limits and then, when that year’s sales target is a little out of reach, they push a little more.” * “Their misbehaviour is adjacent to their previously acceptable behaviour and, when the regulator levies a huge fine, or the police arrive at the door, it takes some time, thinking back, to identify the moment when they crossed the line.” * “…the Volkswagen affair is that it does not appear to fit into any of these categories. There was no grey area. The law set an emissions limit, and the VW models, when they were on the road, exceeded them.” * “VW’s behaviour also did not fall into the category of letting the customers decide. The customers were as deceived as everyone else.” * “Devising a system to detect when a car is being tested surely required planning, expertise and a specific decision. It must have required forethought. It is not something you can drift into through incrementally deteriorating behaviour.”
“VW says emission scandal investigations to take months” http://www.stltoday.com/business/local/vw-says-emission-scandal-investigations-to-take-months/article_78d0ece8-2a2b-55a8-afca-f462afee5e0d.html * “Volkswagen said on Thursday it would take longer than expected to investigate its rigging of vehicle emissions tests, raising the prospect of months of uncertainty…” * “Two sources close to the supervisory board told Reuters the company was looking for ways to cuts costs and boost cash flow to meet the bill for cheating regulators.” * “In a sign it is bracing for a blow to its business, the carmaker imposed a hiring freeze at its financing arm on Tuesday and cut a shift at a German engine factory.” * “The sources said the supervisory board was looking at ways to make savings to try to avoid a downgrade in the company's credit ratings, which would lead to higher borrowing costs.”
“VW emissions scandal is a one-off incident, says motor industry boss” http://www.theguardian.com/environment/2015/oct/01/vw-emissions-scandal-a-one-off-incident-says-motor-industry-boss * “…cheating on vehicle emissions tests is limited to one company and should not be taken to indicate an industry-wide problem, the UK’s top representative of the car industry insisted on Thursday.” * “…Hawes said the industry had made “years of progress” in cutting pollution from harmful emissions, including NOx and particulates, and was working to improve standards further. “I do not believe we should denigrate the industry’s contributions just because of one company.”” * “But he also urged reform of government practices for testing car emissions. “The current regime needs to be reformed, and to be reformed quickly,” he acknowledged. “Something has to change, and it is changing.”” * “Other manufacturers have also seen their share prices decline, and calls for further investigations are likely to involve the full range of diesel companies.” * “He also defended diesel’s record on climate change, as the greater fuel efficiency of diesel engines has reduced carbon dioxide output. Since 2002, about 3m tonnes of CO2 has been saved as a result, he said. “Climate change, in all this, seems to be forgotten,” he said.”” * “Nick Molden, chief executive of Emissions Analytics, which has developed emissions-testing systems, said the current testing regime “is not policed”, and government authorities needed to “make sure that emissions are policed for life” of the vehicle.””
“EPA's notice of violation of the Clean Air Act to Volkswagen [press statement]” http://www.theicct.org/news/epas-notice-violation-clean-air-act-volkswagen-press-statement * “International Council on Clean Transportation” * “Investigation into "defeat device" allegedly used to circumvent emissions tests began with ICCT-sponsored research on in-use emissions from diesel passenger cars” * “…beginnings in an ICCT research project done in collaboration with West Virginia University during 2013 and 2014, which aimed to evaluate real-world operating emissions from light-duty diesel vehicles in the United States. The ICCT conducted in-use tests, using portable emissions modeling systems, on three vehicles: a VW Jetta, a VW Passat, and a BMW X5. * “In the tests, conducted over five pre-defined routes categorized based on their predominant driving conditions (highway, urban/suburban, and rural-up/downhill driving), real-world nitrogen oxide (NOx) emissions from the Jetta exceeded the US-EPA Tier2-Bin5 (at full useful life) standard by 15 to 35 times. For the Passat, real-world NOx emissions were 5 to 20 times the standard. The BMW vehicle was generally at or below the standard, and only exceeded it during rural uphill operating conditions.” * “"The BMW vehicle's performance on the in-use tests shows that the technology needed to meet the U.S. motor vehicle air pollution emission standards for diesels is available," said Francisco Posada, who led the research project.” * “ICCT research studies in Europe have repeatedly found large and growing gaps between real world emissions and the regulatory certification levels. “This is a global problem that will require a coordinated global solution,” said Kodjak.”
Volkswagen Sustainability Report 2014 http://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2015/04/group-sustainability-report-2014.bin.html/binarystorageitem/file/Volkswagen_Sustainability_Report_2014.pdf * P.137

“VW’s Stock to Be Removed From Dow Jones Sustainability Indexes” http://www.dispatchtimes.com/vw-s-stock-to-be-removed-from-dow-jones-sustainability-indexes/111871/ * “…Dow Jones sustainability indexes, which track the performance of companies that rank the best in their industries in terms of economic, environmental and social criteria.”
“Volkswagen Stock Forecast for October 2015: Is This the Bottom?” http://www.profitconfidential.com/stock/volkswagen-stock-forecast-for-october-2015/ * “…the emissions scandal, known as “dieselgate,” that cracked the Volkswagen Group and Germany’s squeaky-clean image as a prosecutor investigates the group’s Audi luxury brand.”

* “The Volkswagen stock forecast for October 2015 is bleak as the group may face criminal prosecution as other governments ponder similar legal sanctions.” * “Structural changes will take place even if it doesn’t threaten the resilience of the wider German economy, despite the Group’s significant contribution to it.” * “Doubtless, VW will have to sell at least one, if not more, of its 12 brands. These include such names as Bugatti, Bentley, and Lamborghini; icons of the company’s growth over the past 15 years. Along with Martin Winterkorn, Volkswagen has already suspended some executives because of the scandal, including Audi’s head of research and development.” * “The government of the German province of Lower Saxony, a major shareholder, has already expressed its concern and anger over the “dieselgate” scandal’s fallout on the VW share price. The state, which has a seat on VW’s board, has accused the company’s management of having kept it and other members in the dark about the VAG Group’s clash with U.S. authorities for a year.” * “Enron, like VW, had until the weeks before its ultimate demise, become a model of social and corporate responsibility, setting standards that its competitors tried to emulate all over the United States and beyond.” * “Europe’s overall recovery, which started a few months ago, relied largely on a recovery of the automobile sector as a whole. “Dieselgate” will prevent VW from taking full part in that trend, even if it was poised to be its biggest beneficiary. An interruption now is the last thing the company needs.” * “Its share price will face a tumultuous period, settling at a price that is not more than half of its 2015 high of $52.87. It is now trading at about $23.00 in a rally, but before considering VW a bargain, there are many events to consider. The stock has more room to fall before a true recovery can begin.”
“What Does The VW Scandal Tell Us About Branding?” * “Eleven million VWs, Audis, SEATs and Skodas worldwide may have to be recalled…[and] nearly one million tonnes of extra pollution has been emitted into the atmosphere.” * “…valuation consultancy Brand Finance has estimated VW’s brand value to take a $10 billion hit.” * “In recent years Volkswagen has poured heaps of money and energy into environmentally led advertising campaigns; campaigns in which ‘clean-diesel technology’ has been a message one VW Vice President wanted to hammer home.” * “Negative tweets about the brand rocketed from 1,187 in the seven days before the news broke to 99,900 in the week after.”

“VW Scandal a Growing-Up Time for the CSR Movement" http://www.sustainablebrands.com/news_and_views/marketing_comms/dr_john_izzo/vw_scandal_growing-_time_csr_movement * “The lessons of VW’s misstep are several. First, there is a price to pay for betraying the trust of consumers and the price is higher than it has ever been. Not only is VW’s stock declining but it is now talking about having to reduce investment in key parts of the business from the fallout. There are already 227 lawsuits against the company, and likely more to come.” * “The promise of being “green” and the subsequent breaking of that promise will exact a tremendous toll on the company. The company will hardly be a magnet for top talent and conscientious consumers will shun it for years.” * “Consumers have always cared about companies being good but the price for not being good used to be very low. When the Exxon Valdez spilled oil all over the Alaskan coast it was a PR nightmare for the company, but the stock price barely declined. Thirty years later when BP spilled oil across the Gulf, its stock price was cut in half, as was that of Halliburton. To this day, consumers likely think of only one thing when they see the BP sign.” * “But it’s not just VW that will pay a price this time. This scandal is likely to fuel consumer belief that companies are more interested in greenwashing and doing the occasional good deed or project than changing their core values.” * “…It also means that trust in corporate communication is likely to go lower than it already is making the job of corporate communicators even tougher.” * “…it is going to make it much harder for companies to communicate their story – it will make other CEOs and companies more nervous about making claims and make consumers all the more skeptical of what we try to tell them in the CSR space.” * “There is an upside to this scandal, however: It may help separate the wheat from the chaff. Those companies who are walking their talk will persevere and work even harder to prove their claims. Those who are tempted to greenwash may think more than twice about making false or misleading claims. Consumers will be even more likely to look to third parties to confirm green and good claims.”

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