Published: September 25, 2015
The Environmental Protection Agency accused Volkswagen of cheating the emission tests that all cars must pass before being released to the public.
Friday In 2012 the EPA noticed that the 2012 Volkswagen Jetta had much higher emissions of nitrogen oxides than when it was in a lab test. This is due to a software program that was installed in the cars. The program would change the emission results when the car was being tested. However when the car is being driven on a regular basis the emission of nitrogen oxides increases. The EPA has alleged that there were roughly 500,000 cars involved including other VW models including the Passat. Volkswagen will most likely face a criminal trial with penalties in the billions of dollars. This is just one of the current problems facing VW this year.
In December of 2014 VW tried to appease regulators by voluntary recalling their cars in the hopes to fix the problem. However at this point it is unclear whether they were trying to cover up their mistake or truly rectify the problem. The one thing that came out of the recall was the continued emission problems which lead to continued investigations. Junior international business major, Jason Martinez said “It will negatively affect the company because customers now live in places where emissions standards are highly regulated. This means that in order to correct this problem they will recall the vehicles with faulty software and fix the emission problem that will cost thousands of dollars per car.” Graduate occupational therapy major, Donna Opeikun agreed with Martinez saying consumers are going to rethink buying Volkswagens which will decrease sales.
VW CEO Martin Wilkerkorn has been having a rough year with the company due to falling sales in the U.S. and China. These have caused major lashouts against him including a coup to try to force him out. He currently has the backing of the majority stock holder, but with a company that has $203 billion in sales and 600,000 employees who knows what the future could hold. Currently Wilkerkorn is doing all he can to rectify the problems caused by the firm. Peter Anderson, Ph.D., a marketing professor here at The University said, “Companies like that will be okay because they have a strong brand name. People will forget after a few months as long as they pay the monetary fines.” When asked if Wilkerkorn will be able to hold on to his job Anderson said, “If it’s just in the U.S., then I don’t think they will fire the CEO. Still, for the shareholders it doesn’t matter if the cost is great enough.”
It is unclear what the rest of the year will bring for VW but we can be positive that this will have been a very costly mistake for the company.