Volkswagen customers are furious, and the executives have a lot of explaining to do. Chief Executive Martin Winterkorn may be known for his meticulousness, but he missed the boat in ensuring that the company met ethical industry standards. An investigation has revealed that millions of diesel cars don't meet emissions guidelines; worse yet, software to intentionally deceive tests was built into many models.
A New York Times article covers background (drama) between Winterkorn and former Chairman Ferdinand Piëch. Now, Winterkorn seems to be holding the responsibility. Because VW has centralized management practices, he'll have a tough time convincing stakeholders that senior management wasn't involved.
As you can imagine, VW customers aren't happy about the situation. They bought the "clean diesel" line from the company and "green" award-winning Passats, Golfs, Jettas, Beetles, and Audi A3's that aren't what the company claimed. The fixes are expensive and will cause drops in performance or trunk space. A Wired article also warns that, whether people "dodge the recall or not, your car's resale value is likely to drop as far and fast as VW's stock, which has plunged 20 percent since the feds came down on VW Friday."
On its website, VW posted two statements relevant to this situation. The first addresses the findings and apologizes (below), and the second-issued two days later-says the company is "working at full speed to clarify irregularities concerning a particular software used in diesel engines."
In addition to these written statements, Winterkorn created an apology video:
UPDATE: Today's post, as predicted, included Winterkorn's resignation:
- Analyze the two company statements. In what ways do they rebuild company image, and how do they fall short?
- What else does the company need to do to gain consumer confidence? What should Winterkorn do?
- The news was announced on Sept. 20. How many days do you predict it will take him to step down?