By: Marisa Ballard
With headlines buzzing over the resignation of Volkswagen chief executive Martin Winterkorn, now is the perfect time to talk about this disastrous scandal and why it’s important to us as PR students.
For those that haven’t heard, Volkswagen was recently caught in what bbc.news is calling a “diesel dupe”. The company admitted that some of their cars had devices that were programmed to emit lower levels of harmful emissions during performance tests. Outside of the tests, the cars emitted emissions up to 40 times above what is legal in the United Sates.
This is very bad for many reasons. The biggest and most damaging one being that Volkswagen lied. The company lied on their tests, it lied to their dealerships, but most importantly, it lied to their customers. When talking about huge companies such as this one, brand loyalty and reputation are the two most important contributors of success. So when you take away the consumer’s trust, your whole brand essentially falls apart.
Executives for the company have already began the grueling process of admitting their wrongdoings. Michael Horn, chief executive of the Volkswagen Group of America, offered an apology, saying that they have “totally screwed up” and would work hard to make things right with everyone. Even Winterkorn himself said, “I personally am deeply sorry that we have broken the trust of our customer.” Not surprisingly, he resigned the next day.
But even with these statements taken into consideration, the scandal will have lasting impact on the company’s image. For so long, Volkswagen has been a trusted luxury brand. However, because of these revelations, it will have to work excruciatingly hard to earn back the trust of its customers. Already, Volkswagen shares have plummeted 18 percent on Monday and 20 percent the following day. There’s no telling how far the stocks will plunge because of this, but I’ll make an educated guess that it’s going to be bad and it’s going to be quick.
So, as PR students, we have to ask ourselves, what could they do? I’m sure we can come up with a few ideas, but regardless of how good their recovery strategy is, it will take a long time for consumers to get past this. It will take even longer to earn their trust back.
Is this the end for Volkswagen? Only time will tell. What we can say for sure is that in order for Volkswagen to make a comeback, their PR team will need to do some major crisis management. But as we have seen from other high-profile scandals such as the Enron disaster —that eventually led to its bankruptcy— coming back from something as damaging as this can be hard.
Let this be a lesson to all companies and PR professionals out there, to never lie to your consumers because in the end, the truth will come out and when it does you’re most likely going to be out of a job. It is our responsibility, as future public relations practitioners, to build lasting relationships with our clients, not to deceive them.
But hey, if Volkswagen could get past the fact that Adolf Hitler created it then maybe there is hope for it after all.