The Volkswagen Emission Scandal

Volkswagen is one of the largest automakers in the world and it has a global reputation as a high-quality German auto brand. Social responsibility is included in VW’s corporate culture and it seems that Volkswagen made some advances in Corporate Social Responsibility because the corporation was ranked 11th 2015 in the Global CSR Rep Track 100, which listed companies by reputation (Reputation Institute, 2015).However, the company has been threatened by an emission scandal which broke in September 2015, when the Environmental Protection Agency (EPA) disclosed that Volkswagen had installed defeat devices on diesel cars which were sold in the US. These devices equipped on VW cars cheated regulators in such a way that it could detect

Volkswagen is under investigation following reports from the EPA that they had installed software into their engines that deceived emissions testers. Furthermore, engineers updated this software in 2014, claiming that they were improving the vehicles. James Liang, a senior engineer who had worked for Volkswagen for 30 years, admitted to investigators in September of 2016 that he had designed the software in question. Further investigation has revealed that this conspiracy may have involved executives of the company. It is unknown to the public whether Liang was acting under orders when he designed the software or he decided to create it on his own to meet requirements his superiors gave him. Both rule utilitarianism and Kantian duty ethics

Volkswagon was caught cheating on their diesel emissions by a man named Daniel Carder and his small research team at West Virginia University in late 2012 through May 2013. The team consisted of a research professor, two graduate students, a faculty member and himself. Their team originally wanted to investigate emissions to help the diesel cars in Europe. There has been much data suggesting vehicles in Europe have high nitrogen oxides and dioxides. The goal was to look at emissions in the U.S. where the emission standards were very strict. It was thought that if the cars were found to be clean, then they could take the data results to Europe, and say “why can’t you do the same in Europe?” The small research team had been granted $50,000

Too often I find myself utterly shocked at how fickle people are. After Volkswagen was caught polluting at a horrifying rate, people grew outraged. The company immediately apologized, fired their CEO, and paid their customers a modest fee.

As a multinational corporation, the implication of the scandal determines the fate of numerous stakeholders both internal and external. Internal stakeholders comprise of the board, managers and employees while external stakeholders subsume shareholders, customers and suppliers. The economic, political and social impacts of the dishonest practices would shape the fate of Volkswagen and affect the future prospects of the automotive industry. Common shareholders whilst not involved in the day to day running of the business placed faith and belief in the firm by providing capital had suffered severe economic loss as share prices (get something for stat). Despite the callous deception in advertising the defeat device displayed no signs of disturbing vehicle performance, however, customers of Volkswagen and its subsidiary vehicles suffer from lower resale value. In addition, even though the scandal was global, European consumers were the most affected with diesel cars accounting for 41% of all European cars (Fontaras, 2016). This high percentage in respect to other nations is a result of incentives provided by the European Union for the purchase of diesel vehicles such as subsidies towards the production process resulting in lower premiums compared to petrol counterparts (Vidal, 2015) In additional with sales falling suppliers of Volkswagen would likely lose future contracts or have current contracts downgraded as less parts are required. Thus, this loss of future

In this report, I am going to evaluate the influence of different stakeholders exert at Mercedes Benz. The stakeholders I will be discussing is the owner of the business, customers who buy cars as they provide good quality of service, employees who help the business to perform well and making profits and the Government who support Mercedes Benz because they have been running successfully throughout the years so they want to invest money to further develop the business. On the other hand, I will make the following points in my report is by commenting on the level of influence that each stakeholder exerts on Mercedes Benz. I will also be referring to evidence from different sources for the comments that I make. I will state the strengths and the weaknesses on the influence of different stakeholders. Also, I will make recommendations on how Mercedes Benz can do to overcome the weaknesses which can affect their performance. At the end I will write a conclusion by summarising what I wrote in the report, which stakeholders have the most influence and which stakeholders have the least influence in Mercedes Benz.

Volkswagen wants to become a global and environmental leader in the automotive world and has developed the “Strategy 2018”. The “Strategy 2018” is stated in their latest annual report in the goals and strategies section as follows:

Soon independent laboratories began to call into question the touted emission numbers, showing that tests in their labs did not match results that Volkswagen was claiming. This escalated to a worldwide scandal, resulting in unprecedented investigations and lawsuits.

On September 9, 2016, a veteran engineer of Volkswagen AG by the name of James Robert Liang pleaded guilty to charges of conspiracy to defraud the government, committing wire fraud, and violating the U.S. Clean Air Act. While working in Germany in 2006, Liang was part of a team charged with producing a new fuel-efficient diesel engine that satisfied new U.S. regulations on vehicle emissions. He and his team eventually came to the conclusion that their engine could not satisfy these new regulations while maintaining consumer expectations of engine performance. Their solution to this dilemma was to implement illegal software (known as a “defeat device”) into newly produced vehicles sold in the U.S. The purpose of this software was to detect any emissions test being performed on a vehicle and alter the results to show cleaner emissions on the onboard computer. Nearly 500,000 vehicles with this defeat device were sold in the U.S.; by 2008, consumers began to experience issues in their vehicles (not knowing it was due to the emission test software), and Liang worked to refine the device even further. The entirety of the scandal eventually came into the public spotlight in 2015 (Guess, 2016, p.1). The subsequent paragraphs of this essay will first discuss Kantian duty ethics and rule utilitarianism, and focus on analyzing the moral implications of Liang’s actions in reference to these moral theories.

In 2013, the International Council on Clean Transportation (ICCT) began conducting ?on-road emission tests for cars?. The investigation on Volkswagen identified the emission levels were nearly 40% higher than the defined limits (Jung & Park, 2017). Ultimately in 2015, Volkswagen publicized a recall of more than 450,000 diesel cars resulting from an inability to operate within the required legal parameters. Specifically, the vehicles were designed to ?cheat on emissions testing? and ultimately produced ?air pollutants well above the legal limit? (Reitze,

Volkswagen stunned the world on September 18, 2015 with its response to the U.S. Environmental Protection Agency's (EPA), see that Volkswagen's "clean diesel" vehicles were seen to abuse the Clean Air Act. In its response, the German automaker accepted that it had deliberately arranged its line of Turbocharged Direct Injection (TDI) diesel engines with a "defeat gadget" that was relied upon to "neglect, fail, or render out for the count parts of a vehicle's release control structure" in the midst of emission testing. Initial reports proposed around 500,000 Volkswagen diesel vehicles, indicate years 2009 through 2011, were impacted by the device. As the shock continued spreading out, the assessed number of vehicles affected created to 11 million

In today’s society we often come to many debates on several issues that go on in our world today. Recently there was an ethical debate on whether or not it is ethical to release vehicles with software that defeats emission testing by the EPA. Volkswagen is being accused of using illegal software designed to hide emissions during testing by installing cars with a software. The EPA accused Volkswagen of using the device in nearly over a half a million cars (Davenport). The cars are reportedly to have been installed with a software that had the ability to turn off the emissions controls when driving normally and turns them on when the vehicle is undergoing an emissions test. With all of these assumptions of Volkswagen cheating the emissions testing does that question their ethical corporate responsibility?

In September 2015 the U.S. Environmental Protection Agency (EPA) announced that irregularities has been discovered in relation to nitrogen oxide (NOx) emissions in Volkswagen Group diesel engines and also in the software installed in vehicles with type V6 3.0 l diesel engines. As soon as discovery became evident the Group’s management started internal investigation regarding software errors and potential number of vehicles affected. As a result, number of vehicles affected turned out to be over 10 million, 8.5 million in EU and approximately Euro 2.5 million in rest of the world. In October 2015, five-point plan was provided by Volkswagen’s management team to solve the issue. The main idea of the plan was to recall all the vehicles affected, review and replace emission testing software and reorganize management structure by making it more decentralized and

Volkswagen group sells passenger cars under Bentley, Bugatti, Lamborghini, Audi, Porsche, Seat, Škoda and of course Volkswagen itself and is one of the biggest car manufacturers in the World. Unfortunately in 2015 it emerged that Volkswagen was involved in unlawful practice regarding their diesel cars not meeting emission standards and how they tried to rectify this problem in an unlawful manner.

After the announcement of the emissions scandal, Volkswagen is fumbling to figure out how to pick up the broken pieces of its brand image. Volkswagen had ruined the trust of all of its stakeholders. The announcement of the cheated emissions test has crushed Volkswagen’s stock price by almost 20%, which implies an almost $27 billion loss in market value. This scandal required the recall of 11 million cars with an expected cost of over $25 billion in penalty fees and the cost to fix recalled vehicles. This scandal of much higher than stated emissions directly contradicted with Volkswagen’s branding of a clean emission diesel vehicle. It could not have gotten much counter-intuitive. Volkswagen has spent 45% of its television advertising budget directly focusing on Volkswagen’s products’ low emissions. That marketing budget is now valueless. However, most importantly, Volkswagen upset its customer base. The owners of these recalled vehicles not only feel lied to and betrayed, they have to take time to bring their recalled car in to get fixed. But, one of the biggest complaints is the loss of resale value totalling nearly $5000. This may disrupt repeat customers and