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VW CEO Matthias Müller’s Non-Apology

The worldwide press has hammered Volkswagen for months due to its emissions cheating scandal. The company initially blamed a small group of engineers and tried to assure consumers, governments and shareholders that VW’s management was unaware of any wrongdoing by the company. That approach wore thin rather quickly and VW’s board ousted CEO Martin Winterkorn in the hopes that such a major management shakeup would stop the bleeding and perhaps even provide a PR win.

Courtesy: DPA

After all, this scandal has tarnished the image of VW and created a potential liability so large that it might reach $48 billion in the US alone.

In an effort to bring this fiasco to a close, the company has been focusing on two issues. First, it’s attempting to satisfy customers via financial incentives and second, it’s been working on a “fix” that would bring their vehicles into compliance.

From the beginning it has been clear that VW hoped to put this episode behind them as quickly and cheaply as possible. The company initially claimed it had no knowledge of the issue, then later admitted it had indeed known for at least one year prior to the scandal becoming public. Similarly, the company has been slow to reveal the extent of the fraud, by claiming only one set of engines was affected. It’s had to revise those statements and expand the list of engines and years affected.

Crisis management specialists generally suggest that the best way to minimize the damage is to apologize, to commit to a transparent investigation and to take the required steps to solve the problem and implement processes to ensure something similar won’t happen again. By most accounts, VW has not embraced this approach.

Much has been made of VW’s insular culture. The company’s complex ownership structure, which is dominated by one family and the German state of Lower Saxony, coupled with a special law aimed solely to keep VW from a takeover, have resulted in a company that is not responsive to outside forces, including shareholders and governments. This makes it less surprising that VW has handled this scandal so poorly.

At this week’s North American International Auto Show, VW CEO Matthias Müller was confident he could make progress on the issue. During his first trip to the US since becoming CEO, he planned to personally apologize to the global press and meet with the Environmental Protection Agency (E.P.A.) and California Air Resources Board (C.A.R.B.) in order to gain approval for VW’s proposed software fix.

VW’s tone-deaf approach was on display by its CEO, who, while officially apologizing, managed to not apologize at all. On one hand, he said, “… we let down customers, authorities, regulators and the general public…and I would like to apologize [for that]”. Shortly thereafter, in an interview with NPR, Mr. Müller claimed that VW did not lie, but that it did not understand the EPA’s diesel emissions rules. That does not sound like an apology or a company that is fully embracing its culpability in a major fraud.

VW’s second setback of the week came when the E.P.A and C.A.R.B. declared that VW’s attempted fix would not be acceptable because it does not provide information how it would impact fuel economy or emissions. It appears that VW had hoped to placate regulators with an ill-defined plan to do something that would make this matter disappear.

Similarly, the company is attempting to minimize its exposure from class action lawsuits by offering a “Goodwill Package” to owners of affected vehicles. These incentives consist free roadside assistance for three years, a $500 Visa card and a $500 debit card that can only be used at VW dealers. While VW owners who take advantage of the offer might limit their ability to claim damages in court, the approach should please dealers who will be able to take advantage of additional foot traffic and cash payments by VW.

Instead of embracing transparency, letting an outside party investigate the causes and doing everything in its power to regain the public’s trust, VW’s approach has been to deny, delay and discount.

Rattle & Hum

For those of you blessed with sub-standard hearing, this may be difficult to understand.  Your ears probably don’t perk up when the fridge starts buzzing because the icemaker came on or when an office light fixture’s pulsing/vibrating signals its eminent demise.  Not the most useful superpower, perhaps, but I am sure it came in quite handy when we slept in caves and had to stay vigilant so as not to be devoured by bears.

In modern times, however, an acute sense of hearing has lost most of its life-saving attributes.  In fact, what once was an asset seems to have turned into a liability.  In today’s society, we are surrounded by noise (a.k.a. noise pollution).  Most would agree that a Harley Davidson thundering down the road is loud.  Now imagine if you had sensitive/good hearing – it’s positively earsplitting.  Other instances of annoyingly loud conditions include movies, bars, live music and riding a motorcycle with a full-face helmet and wearing earplugs.

This affects my sense of enjoyment when it comes to automobiles as well.  As much as I am an enthusiast, I am not enthusiastic about tire noise, road noise, wind noise and engine noise.  In fact, a muted exhaust note is the only thing I am interested in hearing when driving a car.

As you can imagine, I don’t take kindly to any rattling, whining, buzzing, droning, pulsing, and vibrating. Noises that other’s can’t hear drive me batty.  I try to identify every single one, research them in online forums and devise ways of eliminating them.  This rarely works, as I tend to break all the plastic connectors and then can’t reassemble my car.

Dealers are quick to point out that the “bumper-to-bumper” warranty does not include rattles.  When they do humor me, they can rarely duplicate the noise (or so they say).  I will admit that many rattles and especially buzzes are speed and temperature dependent. 

Here’s a winning business idea.  Someone should offer rattle elimination services.  I would gladly pay $50/rattle. As of this afternoon, that’s $200 for anyone who silences my car.