“The Group’s goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.” (Volkswagen’s, mission statement) Volkswagen Group is a German corporation, it manufactures: passenger cars, commercial vehicles, motorcycles and engines. Volkswagen extended its lead over Toyota in May 2016, and it has every chance to finish the year as the world’s largest automaker. (Forbes) The company owns Audi, Volkswagen, Bentley, Porsche, Lamborghini and Bugatti. Volkswagen Group used modern technology to cheat the emissions testing for its clean diesel cars for the past six years. Volkswagen programmed computers in: Audi, Volkswagen and Porsche, to detect …show more content…
German courts have been flooded with lawsuits against Volkswagen from investors who say they have lost billions of dollars because of the emissions scandal. Over 1,400 complaints from institutional and individual shareholders, amounting to over $9 billion in damages. (Clark) The three major stockholders that were the most affected by the emissions scandal are: Porsche SE, German state of Lower Saxony and oil nation, Qatar. The primary shareholder of VW is Porsche SE, which owns 52.2 percent of the voting shares in Volkswagen, says it made a loss of after taxes of 273 million euros or 302.3 million dollars because of the emission cheating scandal. (US News) German state of Lower Saxony owns 20% voting stake in Volkswagen Group, the state is still backing Volkswagen and doesn’t plan on pulling their voting shares. The last major stockholder affected by the VW scandal was oil nation, Qatar, with a 17% stake in the company. The emissions scandal has wiped out a third of the company’s overall value which amounts to over 4 billion dollars. (Pearce) Furthermore, worldwide consumers of Volkswagen cars have been affected by the emissions scandal. South Korea halted sales of any Volkswagen brand cars, such as: Audi, Porsche and VW, Switzerland also banned the sale of any Volkswagen …show more content…
Consumers bought the “clean diesel” engine version of VW because they were trying to do their part in saving the environment. According to Forbes magazine, clean diesel engines are designed to emit 97% less sulfur emissions and still get 30% better fuel economy than gasoline powered engines. (Newman) This led to customers paying more for the diesel engine car, but without the resale incentive of a “green car” and the expected fuel efficiency it is estimated that each car could lose up to $5,000 in resale value. (Newman) When you add up all the cars that were sold under false pretenses that adds up to over $55 billion dollars. (Newman) Even though many consumers worldwide will feel the effect of the VW scandal, some consumers in Europe were lucky. Ford seized and opportunity and offered incentives of up to 2,000 to new-car buyers who are will to turn in their VW or Audi diesel. Ford only offered this incentive across Europe. (Levin) All in all, the Volkswagen emission scandal will not put the Volkswagen Group out of business. The shock and disappointment caused their stock to drop, but a year later and the Volkswagen Group is on its way to the top, again. The Volkswagen emission scandal is nowhere near over because many lawsuits haven’t even seen the inside of a
Increasing environmental awareness, coupled with a responsible American government and improved technology, have all contributed to the comeback of low-and zero-emissions vehicles in the US. It remains to be seen whether the automakers and oil companies will once again work to halt this progress, or embrace it as the technology of a more responsible future.
These activities are not exclusive, and most of them overlap. “For example, a car manufacturer has both an ethical and legal responsibility to produce safe automobiles” (Toliver, 2013, p. 7). In September 2015, Volkswagen was all over the news about their emissions scandal. The software was created to sense when the vehicle was being tested, during testing the software would adjust the results to show a lower emission output. When the vehicle was not being tested and running during regular driving, the software turned off, allowing the vehicle to have emission output levels far above legal levels. Volkswagen has been fined and will have to pay almost $15 billion in settlements in the United States. They must also pay to repair or buy back all affected models by December 2018. This scandal has cost the company a recorded loss in 2015 of $6.2 billion. The company is facing civil and criminal investigations in the United States and Germany as well as other countries (Gates, Ewing, Russell, & Watkins, 2016). Purchasing a Volkswagen now would not give the consumer that “feel good feeling” they want to feel after purchase. Customers see that Volkswagen has been lying to the client and have been negligent in environmental
Beginning in 2006, Volkswagen began designing a new version of diesel engine for future cars it planned on producing. The engineers tasked to this job quickly realized that they could not meet customer needs and emission standards at the same time [1]. The engineers decided to use software known as a “defeat device” that allowed the car to sense when it was going through an emissions test and reduce its pollution output [1].
In January 2016, Volkswagen engineer named James Robert Liang pleaded guilty of fraud in the United States. He helped in the development of a special kind of engine called “clean diesel” that was used to cheat on the emission tests of the car. The engine was software engineered to detect when it was being tested for the emission and changes the engine to a low-emission mode. Whereas in practice, these Volkswagen cars could output forty times the amount of pollution recommended by the U.S. Emissions. One of the driving forces of the decision was the fact that they weren’t able to design an engine that would meet the U.S. emission standards while also satisfy its customers. As a result, Volkswagen has decided to agree to pay $15.3 billion in civil penalties and allow Volkswagen customers to buy
This case study is an analysis of the trends and mechanism of the car industry through a focus on “Porsche” which is one of the premier players in the automobile industry. This case study provides a global perspective of the automobile industry, with a focus on car industry through the premier company, Porsche. Porsche was founded in 1931 by Ferdinand Porsche, along with his son and son-in-law, Anton Piëch, father of VW Chairman Ferdinand Piëch. Known in its early days as the Porsche Engineering Office, Porsche did not start off as an automaker, but rather a firm that sold design and engineering services to other carmakers. In 1934, Adolf Hitler commissioned Porsche to make a “people’s car” or “Volkswagen.” The forerunner to the VW Beetle, the VW Type 60 hit the roads in the mid-1930s, and in 1938 the first plant dedicated to the manufacturing of the VW was opened. It wasn’t until 1948, three years after the end of World War II, that Porsche produced its first branded sports car. Within two years,...
The first business day after the EPA’s public announcement of the emissions scandal Volkswagen stock was down 20%. But that is just the beginning of the financial impact on the company as a result of the emissions scandal. The EPA has the power to fine a company up to $37,500 for each vehicle that breaches industry standards, the maximum fine running up to about $18 billion.1. In addition, the German automaker has set aside $7.3 billion to cover the costs of recalling millions of cars worldwide, resulting in the company’s first quarterly loss in 15 years of around $2.7 billion accompanied by another stock decline of
The Volkswagen emissions scandal is a series of choices made by the company and the people employed by Volkswagen to install a "cheat" button to alter the amount of emissions produced only under testing situations. Ordinarily, all vehicles on the road that run off of gasoline have a set about of CO2 and other harmful emissions produced by the burning of gasoline. Violation of these rules can result in fines and recalls. Due to an increased attention on car companies to fight global warming and air pollution a number of emissions have lowered in the over the year for tighter regulation on the amount of CO2 produced. Consequently, this reduction in the amount of CO2 produced is the source of the scandal. This change may come across as minor,
“The car is quite unattractive to the average motorcar buyer, is too ugly and too noisy … If you think you're going to build cars in this place, you're a bloody fool, young man."(Volkswagen, 2008, p. 1 ) This is what was once said about the Volkswagen Company; as time has passed no words could have ever been so wrong. Nazi Germany established Volkswagen through Hitler’s persistence in an effort to create an affordable automobile for the German people, but over time the late 1930’s people’s car quickly evolved into a modern day auto enterprise.
In 2014, researchers from West Virginia found out that recent models of Volkswagen vehicles were emitting up to 40 times the allowed levels of nitrogen oxides (2). These vehicles had a special software that would determine when the vehicle was in laboratory testing conditions, and the software would then alter the vehicle 's functionality to emit the legal amount of nitrogen oxides allowed by the EPA. The software was found in around half a million vehicles in the United States. In addition to the bad publicity, the Volkswagen scandal will cost the company at least $15.3 billion dollars in compensation to the owners of the affected vehicles (3). In 2016, Volkswagen engineer James Liang pleaded guilty for being a crucial part in developing the illegal software (3). The software was created because Volkswagen was unable to meet the rigorous EPA emission standards. Therefore, a small team of engineers including James Liang decided to cheat the emission exams to allow Volkswagen vehicles to be sold in the U.S.
This paper will illustrate the moral, social, and factual implications of the Volkswagen scandal regarding the case dealing with emission standards of the diesel Volkswagen vehicles. The reader should note that this analysis will be given from two different philosophical points of view. Namely from the Kantian and Rule-Utilitarian perspective. The paper will attempt to demonstrate the moral implications of the case at hand, and how this applies to Mr. James Liang’s actions. As the reader may know Mr. James Liang worked for the Volkswagen Company for more than 30 years. He and his colleagues worked on creating a low emission diesel engine. In the course of this project, it became apparent that the emission goal could not be achieved with respect
Volkswagen attempted to create a “clean diesel” engine back in 2006 where James Liang was one of the engineers in charge of the project. At this time, Liang and fellow conspirators realized they could not improve the diesel engine to meet emissions regulations as well as keep the customers happy (Schoenberg). Liang began looking into ways to cheat the system. The conspirators designed a software that would falsify data by expressing the vehicle as running “clean” when it actually was operating above emission standards. The engines with the software installed on it were then sold and used on the roads. A few years later, the State of California saw a discrepancy between the emissions measured from the road and the lab, causing questions to be
Volkswagen is a company that’s part of the world’s largest automaker group called the “Volkswagen Group”. Recently, it was discovered that for the past several years the company had been cheating on its emission inspections on their diesel power car. The company installed a computer software in the car that reported emissions much less than what the car actually produced. It was found that these cars emitted 40 times more nitrogen oxide pollutants in the environment than what the United States regulations allow. These levels of pollutants have the potential to cause many respiratory problems and other health concerns. This case resulted in Volkswagen agreeing to pay $15.3 billion dollars to its customers and regulations. The company’s engineer
They have proposed the option to do recalls that have been rejected on several different levels. California Air Resources Board did not accept Volkswagen’s plan to repair the vehicles. (Ramsey, 2015) California researched the plan and determined it was not cohesive enough nor did it have the necessary detailed to be put into place. Again, credibility comes into question; the employees were deceptive when encrypting the “defeat” code. The United States Environmental Protection Agency also agreed with California Air Resources Board that Volkswagen had not submitted an approvable recall plan to bring the vehicles into compliance and reduce pollution the structure of the recall plan is still being worked on by CARB and the EPA. (EPA,
In the Fall of 2015, Volkswagen was accused and found guilty of cheating on emissions tests that were put in place by the United States government in order to regulate the amount of harmful gases released when driving vehicles. In the aftermath of the scandal, their CEO Martin Winterkorn was replaced by Matthias Muller who found himself in need of drastically changing the corporate culture in order for VW to once again be a reputable automobile manufacturer. In order to understand why the scandal occurred in the first place an analysis of the historical culture that had dominated the company until recently. Volkswagen was established by the Nazi’s with help from Ferdinand Porsche and the majority of the company continues to be held by his descendants. Nazi Germany is infamously known to have been extremely authoritarian with orders being strictly followed coupled with a unparalleled sense of self-righteousness. This culture inevitably influenced how VW operated and led to it’s CEOs demanding perfection, setting
However, A typical query proposed that environmental concerns are generally followed by massive upfront investments, which is likely to abate companies’ competitiveness (Mcguire, Sundgren, & Schneeweis, 1988). While in the automotive industry, several cost reduction ways can be brought about by environmental measures to offset, if not exceed, the aforementioned additional investments (Soloman & Hansen, 1985). Descriptive statistics in automotive industry indicated that eco-friendly CSR measures, such as energy-efficient technologies adopted in vehicle-assembly line, innovation for car recycling and dismantling, are believed to be conducive to cost reduction and profitability enhancement (Cortez & Nugroho, 2010). As a case in point, BMW (2014) claimed a cost saving of 15.8 million euros from resource-efficient production. On the other hand, a mounting number of legally binding environmental policies, which may lead to substantial taxation if companies are substandard, have been imposed on the automotive industry. Driven by regulations, automotive companies will tend to proactively improve their environmental performance for tax deductibility to reduce their capital expenditure (Hall, 2010). Despite additional investments required to concretize environmental concerns, these CSR measures can still benefit automotive companies by reducing substantial