It’s still early days, but the Volkswagen story is shaping up as a case study in how not to handle a crisis.
Volkswagen recognizes it has a very big problem on its hands. Germany’s Welt am Sonntag quotes Hans Dieter Potsch, the incoming chairman, calling it an “existence-threatening crisis for the company.”
But the fact that Potsch, VW’s chief financial officer since 2003, was given the chairman’s job, and that another company insider, Matthias Müller, has been named CEO, suggests the board is circling its Volkswagens. The FT contrasts that defensive crouch with how Siemens handled its bribery scandal in 2006, bringing in an outside chairman and CEO, and ultimately taking legal action against former executives.
Emerging evidence makes it clear that the installation of software to defeat emissions controls was not the result of some rogue operation – it was driven by decisions made by the company’s top engineers and approved at the highest levels. It is a bright neon sign pointing to a sick corporate culture. That won’t be easy to change, and it won’t be solved by papering the world with apologetic newspaper ads.
Potsch and Muller may want to learn from GM’s Mary Barra, also an insider, who when faced with the ignition switch scandal was surrounded by fellow executives who also said: This is bad, but we can get over it. Barra’s response: I don’t want to get over it.
“I don’t want to set it aside and explain it,” she told Fortune’s Geoff Colvin last year, “because I think it has uncovered some things in our company that it’s critical we challenge ourselves to change and to fix.”
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