Why Volkswagen’s PR Disaster Was Totally Predictable

November 3, 2015, 8:01 PM UTC
A Volkswagen car is seen in front of Toyota Motor Corp cars at their dealership in Tokyo
A Volkswagen car (R) is seen in front of Toyota Motor Corp cars at their dealership in Tokyo July 30, 2014. Volkswagen is closing in on Toyota Motor Corp as the global leader in vehicle sales, with a rapid expansion drive in China - the world's biggest auto market - while Toyota curbs growth to focus on shoring up quality. REUTERS/Toru Hanai (JAPAN - Tags: TRANSPORT BUSINESS) - RTR40LJD
Photograph by Toru Hanai — Reuters

Volkswagen seems determined to punish people for crediting it with too much intelligence.

With its confusing and contradictory response to Monday’s announcement from the Environmental Protection Agency (EPA), the company has walked itself into a trap from which it will have difficulty escaping.

This was all the German automaker had to say in response to the EPA’s second—and potentially game-changing—Notice of Violation regarding the emissions levels of its modern diesels:

The United States Environmental Protection Agency (EPA) informed Volkswagen Aktiengesellschaft on Monday that vehicles with V6 TDI engines had a software function which had not been adequately described in the application process. Volkswagen AG wishes to emphasize that no software has been installed in the 3-liter V6 diesel power units to alter emissions characteristics in a forbidden manner.

Volkswagen will cooperate fully with the EPA clarify this matter in its entirety.

Only, the EPA said nothing of the sort. The EPA’s Notice of Violation said:

Volkswagen manufactured and installed defeat devices in certain model year 2014-2016 diesel light duty vehicles with 3.0 liter engines. These defeat devices bypass, defeat or render inoperative elements of the vehicles’ emission control system that exist to comply with CAA emission standards.

In effect, VW’s answer boils down to: “Oh no we didn’t. And by the way, you can’t even make your own arguments clearly. Here, let us do it for you.” Such a response can only reflect one of two things: either VW really believes it can wriggle off the hook with verbal acrobatics that will allow it to argue in court that it really hasn’t broken the law (“this isn’t a defeat device, your honor, it’s just a piece of software that we just find hard to describe”); or VW simply hasn’t understood the magnitude of the new accusations—that is huge.

If the EPA is accusing Porsche of selling a car with defeat devices, then we are into the same dynamic of ignorance-or-complicity that finished off CEO Martin Winterkorn. Matthias Müller was CEO of Porsche. Can he honestly claim he didn’t know how dirty the Porsche Cayenne was? And even if he can, should we trust someone capable of missing such an obvious with the task of cleaning up the group? If the proper response for Martin Winterkorn was: “I knew nothing but I must take responsibility, therefore I resign,” what is the proper response for Müller?

To be fair to Müller, the ignorance argument is consistent with the line that VW has defended stoutly from the outset (summarized by Michael Horn’s testimony to Congress last month): that it was all the conspiracy of a few senior engineers. But it beggars belief that the board who appointed Müller didn’t see the problem of elevating the Porsche CEO to lead the VW group just as it was (reportedly) suspending Porsche’s chief engineer.

There will be plenty at VW who think this is getting a bit unfair. Data from the German Drivers Association ADAC (below) show emissions from almost all of the auto sector’s old-generation diesels vastly exceed legal norms in real world conditions, as opposed to lab conditions.


But that is to miss the point. VW is in the position it’s in today because it dragged its heels over admitting what it knew to be true. If the EPA’s Notice of Violation is true, then VW’s claim that only the old, EA189 engine had defeat devices is a lie, a lie that VW has constantly and loudly repeated for the last month. Every such action is going to increase the final litigation bill by millions of dollars.

When is VW going to learn?
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