Volkswagen is slowly recovering from its 2015 emissions scandal during which the company was involved in deceiving the public about its direct involvement in cheating nitrous oxide emission tests affecting 11 million automobiles worldwide. In September, the EPA discovered that The Volkswagen Group (which owns Audi, Porsche, Lamborghini, and other brands) purposely outfitted “deceit devices” on Volkswagen and Audi diesel passenger cars from 2009 and later. The ramifications of this scandal have been disastrous for VW’s brand image and stock prices, with shares sent plunging 30% from a 52-week high in March; Moodys, a credit-rating agency, downgraded the company, citing the cost and time it will take to recover.
VW reports that it will take at least 2 billion just to fix the CO2 problem; set that aside from the 6.7 billion it will take to cover the recall and fix the almost 12 million cars installed with these “deceit devices.” Fortunately, for the company, VW’s third quarter financial records havereported that sales have not been affected as much as forecasts predicted. However, VW can expect more lawsuits to come and possible indictments of its senior officers.
While former CEO Martin Winterkorn stepped down immediately after the scandal, the once “rudderless company” now has a new chief officer to manage the backlash from this fiasco. New CEO Martin Mueller has vowed to do whatever it takes to fix the company. He wants to create more transparency and a corporate culture that is inclusive. This scandal is also not an isolated event, having implications that may have regulatory commissions implementing even stricter and tighter controls on emission tests on a global scale.