Question

Volkswagen Emission Scandal

How did Volkswagen perform in terms of their responsibilities to consumers? Provide a comprehensive assessment.

Answer 1

INTRODUCTION-

Volkswagen is the German automobile manufacture, which is also the largest car manufacture in Europe and enjoys a high reputation in the world for its excellent performance and rigorous producing process. Volkswagen was listed in the Fortune global 500, and its economic power and brand effect is obvious to see. Such a large corporation ought to shoulder the corresponding responsibilities for society because social responsibilities and profit seeking are closely linked, there is no player in the market earn huge profits without undertaking any social responsibilities or donating to the society. At Volkswagen, corporate social responsibility is seen as a significance towards sustainable development. we also believe that to achieve a meaningful long-term existence, Volkswagen must also perform its obligations to society, so as to become a good corporate citizen in the global. The enterprise-tops in Volkswagen emphasize the far-reaching influence on social and environmental responsibilities which can bring sustainable development as well as much profit

Company’s attitudes to responsibilities and ethics-Volkswagen persue environmental, economic and social objectives in equal measures, that is to say, these three goals combined with each other and no one can realize without the supports of other two. Corporate responsibility means that fulfilling the responsibilities or obligations towards the stakeholders of a corporation. What is more, the corporate responsibility tends to distinguish between the stakeholders’ expectations and the obligation of a corporation (Lockheed, 2004). The tops of Volkswagen realize the importance of sustainability. While the corporate social responsibility can be understood in terms of corporate responsibility, which put much emphasis on the obligation given to communities, charitable cause and environmental stewardship and so on (Johnson & Johnson, 2002). For multinational corporations, they should shoulder the responsibilities of employing employees, taking care of the losses and benefits of consumers and protecting communities and local environment at the same time of gaining profits as well as protecting the rights of shareholders.

Under the vision of the sustainability, the business practices and depletion of resources must not compromise the ability of future generations to satisfy their own needs. Many corporations use CSR as a strategic way to gain public support for their presence in global markets . Volkswagen actively take part in the social activities and quick respond to the demand or regulation of local governments. Volkswagen pay attention to its responsibilities no matter in Germany or any other foreign countries so as to grasp the opportunities of the long-term future. The core idea of development in Volkswagen combines ecological, social issues with economic development, which radically protect the environment and realize the sustainable development. The corporate ethics is an important standard which can determine whether a corporation can survive in market competition.

Corporate ethics refers to relying on the social public opinion, traditional habits and inner belief in specific social atmosphere, regarding ethical principles, moral criterion and moral activities as standard to measure the behaviors of a corporation. Volkswagen abides by the laws and regulations in Germany and any other countries, and advocates a fair competition with rivals. Environment-friendly, social progress and governance are three essentials to measure the level of sustainability of a corporation. During the time of depressing bailout in 2008, Calvert Sustainability Research Department that is famous for sustainable and responsible investments, singled out Toyota Motor Corporation, Ford Motor Company and Volkswagen for praise in its latest recognition for automakers with excellent environmental, social and governance practice, these automobile manufactures have no choices but to strictly comply with toughening fuel economy regulations which tightly controls the car displacement and carbon emission, to some extent, reflects the corporate ethics. Corporations are using CSR tactics to win the war for talent and market share (Bhattacharya et al., 2008). For Volkswagen, makes full use of innovation and make fuel-efficient, cleanest cars to meet the demand of environment as well as praise for its attractive appearance and high safety which enjoys a high reputation in the world.

The Volkswagen emissions scandal - began in September 2015, when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group. The agency had found that Volkswagen had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate their emissions controls only during laboratory emissions testing which caused the vehicles' NO
x output to meet US standards during regulatory testing, but emit up to 40 times more NO
x in real-world driving.Volkswagen deployed this programming software in about eleven million cars worldwide, including 500,000 in the United States, in model years 2009 through 2015.

In 2014, the California Air Resources Board (CARB) had commissioned a study on emissions discrepancies between European and US models of vehicles from the International Council on Clean Transportation (ICCT), summing up the data from three different sources on 15 vehicles. Among them was a group of five scientists at West Virginia University, who detected additional emissions during live road tests on two out of three diesel cars. ICCT also purchased data from two other sources. The new road testing data and the purchased data were generated using Portable Emissions Measurement Systems (PEMS) developed by multiple individuals in the mid-late 1990s and published in May 2014. In 2015, Daniel Dalton MEP delivered the only legislative response to the emissions scandal that will ensure cars are tested on the roads throughout their lifetime.

Regulators in multiple countries began to investigate Volkswagen,and its stock price fell in value by a third in the days immediately after the news. Volkswagen Group CEO Martin Winterkorn resigned, and the head of brand development Heinz-Jakob Neusser, Audi research and development head Ulrich Hackenberg, and Porsche research and development head Wolfgang Hatz were suspended. Volkswagen announced plans in April, 2016 to spend €16.2 billion (US$18.32 billion at April 2016 exchange rates)on rectifying the emissions issues, and planned to refit the affected vehicles as part of a recall campaign. In January 2017, Volkswagen pleaded guilty to criminal charges and signed an agreed Statement of Facts, which drew on the results of an investigation VW had itself commissioned from US lawyers Jones Day. The statement set out how engineers had developed the defeat devices, because diesel models could not pass US emissions tests without them, and deliberately sought to conceal their use. In April 2017, a US federal judge ordered Volkswagen "to pay a $2.8 billion criminal fine for rigging diesel-powered vehicles to cheat on government emissions tests". The "unprecedented" plea deal formalized the punishment which VW had agreed to. Winterkorn was charged in the United States with fraud and conspiracy on 3 May 2018.

The scandal raised awareness over the higher levels of pollution emitted by all diesel-powered vehicles from a wide range of car makers, which under real-world driving conditions exceeded legal emission limits. A study conducted by ICCT and ADAC showed the biggest deviations from Volvo, Renault, Jeep, Hyundai, Citroën and Fiat,resulting in investigations opening into other diesel emissions scandals. A discussion was sparked on the topic of software-controlled machinery being generally prone to cheating, and a way out would be to open source the software for public scrutiny.

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