Openness, Honesty and the Need for a Good Crisis Communications Plan: Volkswagen Scandal

It is hard to fathom that the world’s largest and most successful car manufacturer got caught red handed fudging its fuel economy certification information by altering software and hardware on 11 million diesel equipped cars.

The company only came clean on its deceptive practice of programming its cars to conform to emission standards only while being tested after U.S. authorities threatening to deny certifying 2016 models.

It is one thing for a company like General Motors to face a crisis like the faulty ignition switches that claimed multiple lives and cost the company $900 Million in fines. It’s quite another thing when a company creates its own crisis.

VW now faces fines up to $18 billion in the U.S. alone on top of multiple lawsuits. The company has withdrawn its affected diesel cars from sale here in Canada. Company management in Wolfsburg has warned employees of job cuts as the car sales nose dive and the company sets aside billions of Euros in a war chest.

The CEO of the company took days before he fell on his sword and resigned.

The company was slow to follow basic crisis management: Mess Up. Fess Up. Dress Up.

Key messages from the new CEO were week and predictable:

• We are committed to fixing the problems ASAP
• The affected vehicles are safe to drive
• We are developing a remedy that will meet emissions standards

The world is watching the biggest automaker as it struggles with one of the biggest breaches of public confidence in automotive history.

Volkswagen’s fall from grace has been sudden and staggering. If the company has a crisis communications plan calling for timely and meaningful communications with the public, it has not been put into effective use.