Volkswagen Case Study

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By the reading of it, Volkswagen management expressed what seemed like genuine shock when the EPA and California’s Air Resources Board revealed their joint findings regarding the automaker’s manipulation of US emissions testing for diesel cars outfitted with a particular 2.0-liter, four-cylinder engine.

Last Sunday, the company’s then CEO, Martin Winterkorn, issued a brief statement declaring that the Board of Management at Volkswagen AG “takes these findings very seriously.” The findings revealed that the automaker used “defeat devices” to fool emissions testing, effectively concealing the reality that certain cars spew emissions some 10 to 40 times the legal limit.

Approximately 482,000 US cars are equipped with the affected engines …show more content…

Further, Volkswagen has set aside approximately US$ 7.5 billion to handle repairs and related claims.

Class action lawsuits on behalf of consumers will likely follow to help owners recoup the “diminished value” of their vehicles. When a fix is announced, it is expected that the cars will lose performance and suffer a corresponding decline in fuel economy.

Volkswagen executives are on the hot seat with some facing dismissal, including Volkswagen of America CEO Michael Horn. However, US Volkswagen dealers are opposed to the ouster as he has been credited with representing their interests before upper management at Volkswagen’s headquarters in Wolfsburg, Germany.

Horn, a 25-year Volkswagen company representative, assumed his current position in January 2014, just months after the CAFEE study was shared and a mere three months before the CARB-initiated recall. Although dealers laud Horn for his representation in Wolfsburg, what has yet to be revealed is whether he shared the emissions findings with senior management in Germany, including the now-deposed

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