Page 25 - atoday sept 24

BUSINESS A25
Thursday 24 September

Volkswagen clean-car image Volkswagen CEO Winterkorn steps down

dirtied by emissions scandal GEIR MOULSON new beginning.” departing CEO’s “readiness
PAN PYLAS Huber said a successor will to take responsibility in this
MAE ANDERSON Associated Press be discussed at a board difficult situation for Volk-
AP Business Writer BERLIN (AP) — Volkswagen meeting on Friday that swagen.”
NEW YORK (AP) — German engineering may lose CEO Martin Winterkorn re- was originally intended to Stephan Weil, the gover-
some marketing pop after Volkswagen’s stunning signed Wednesday, days approve extending Win- nor of Lower Saxony state,
admission that it rigged emissions tests. after admitting that the terkorn’s contract through which holds a 20 percent
The revelation is particularly damaging since Volk- world’s top-selling carmak- 2018. stake in Volkswagen, said
swagen has long pinned its reputation on its tech- er had rigged diesel emis- VW reversed its market slide, VW is filing a criminal com-
nological prowess, with the tagline, “Isn’t it time for sions to pass U.S. tests during closing up 6.9 percent at plaint, “because we have
German engineering?,” along with its focus on envi- his tenure. 118.90 euros. But VW’s share the impression that crimi-
ronmental sustainability. No replacement was an- price has a long way to go nally relevant actions may
“Brands are all about trust and it takes years and years nounced, and VW still has to recoup this week’s losses. have played a role here.”
to develop,” says Nigel Currie, an independent U.K.- no easy exit from a scandal Nearly 25 billion euros Weil, also a VW director,
based branding consultant. “But in the space of 24 that has suddenly dented (around $28 billion) was promised to “clear up these
hours, Volkswagen has gone from one people could a reputation for trustworthi- wiped out in the first two events with all the possi-
trust to one people don’t know what to think of.” ness that took decades to days of trading after the bilities we have inside the
The company apologized and the CEO stepped build. The smog-test trick- U.S. Environmental Protec- company and ensure that
down, but Volkswagen has yet to explain how the ery has wiped out billions tion Agency revealed that those involved are pun-
cheating was allowed to occur. The company risks in VW’s market value and VW has been violating the ished severely.” The pros-
alienating not only fans of the “People’s Car,” but raised the specter of crimi- Clean Air Act and could be ecutors’ office in Braunsch-
dealers, the local face of the brand, who feel blind-
sided by the scandal. Volkswagen CEO Martin Winterkorn is seen in Berlin. Winterkorn resigned Wednesday, days after
“The most important thing is that VW comes out and
tells the public what happened, who was involved admitting that the world’s top-selling carmaker had rigged diesel emissions to pass U.S. tests
and make sure that it doesn’t happen again” said
Jeremy Robinson-Leon, principal and chief operating during his tenure. (AP Photo/Markus Schreiber)
officer at New York-based corporate and crisis PR firm
Group Gordon. nal investigations and bil- subject to fines of as much weig, near VW’s Wolfsburg
That communication needs to happen soon, says Mi-
chael Jackson, the CEO of AutoNation, the largest lions more in fines. as $18 billion. headquarters, confirmed
auto dealership chain in the U.S. He says VW diesel
owners are angry and dealers don’t have enough Winterkorn took responsi- Winterkorn, VW’s boss since that it is weighing an inves-
details to share with them. Jackson gives VW a week
to explain its actions or he feels the brand value will bility for the “irregularities” 2007, had come under in- tigation of VW employees.
be damaged.
VW risks losing owners like Peggy Schaeffer, 64, a li- found by U.S. inspectors in tense pressure since the Other governments from
brarian from Durham, North Carolina. For Schaeffer,
her 2010 diesel Jetta Sportswagen was the ideal car, VW’s diesel engines, but EPA’s disclosure Friday that Europe to South Korea have
peppy but still environmentally friendly. Now, “I really
feel like I’ve been had. I’ve been hoodwinked. This is insisted he had personally stealth software makes begun their own inquiries,
deliberate fraud and deceit,” she says. Schaeffer is
uncertain what she’ll do next. done nothing wrong. VW’s 2009-2015 model cars and law firms have already
“I’ll watch and wait and see how the company be-
haves,” she says. “I am doing this in the inter- powered by 2.0-liter diesel filed class-action suits on
Being an environmentally friendly company is in Volk-
swagen’s DNA. Back in the 1960s its first U.S. ads urged ests of the company even engines run cleaner during behalf of customers.
people to “Think Small” in an era of gas-guzzling cars.
More recently, Volkswagen launched a global “Think though I am not aware of emissions tests than in ac- There is no immediate way
Blue” campaign in 2010 with the aim to “become the
world’s most ecologically sustainable car manufac- any wrongdoing on my tual driving. of restoring VW’s reputa-
turer” by 2018.
“They had a brand image that is very straightforward, part,” his statement said. The EPA accused VW of tion, but only total transpar-
honest and in recent years dependent on being a
leader on environmental standards and pushing “Volkswagen needs a fresh installing the so-called “de- ency can resolve the scan-
those,” said Kelly O’Keefe, professor of brand man-
agement at the VCU Brandcenter. “Now it appears start ... I am clearing the feat device” in 482,000 cars dal and salvage its brand,
they’ve been cheating to get there, which is a dev-
astating revelation.” way for this fresh start with sold in the U.S. VW later said Jeremy Robinson-Leon,
Recent ads have promoted its “clean diesel” tech-
nology, which provides high fuel economy, in its Pas- my resignation.” acknowledged that similar chief operating officer at
sat, Jetta, and other cars. One campaign shows old-
er ladies in a Passat bickering about whether diesel Winterkorn, 68, resigned software exists in 11 million Group Gordon, a New York-
fuel is “sluggish” or “stinky.” A Jetta ad says the car’s
engine is “painstakingly engineered without compro- following a crisis meeting diesel cars worldwide and based corporate and crisis
mise.”
The scandal broke Friday in the U.S., and the last of the Volkswagen super- was setting aside 6.5 billion PR firm. “The most important
“Clean Diesel” ad ran Monday, according to iSpot.
tv, which tracks TV ads in real time. Volkswagen ap- visory board’s executive euros to cover the costs of thing is that VW comes out
pears to have pulled the ads from its YouTube chan-
nel, although they remain on some dealer pages committee. Its acting chair- the scandal. and tells the public what
and elsewhere on YouTube.q
man, Berthold Huber, said Huber said “Mr. Winterkorn happened, who was in-

company directors are “re- had no knowledge of the volved and make sure that

solved to embark with de- manipulation of emission it doesn’t happen again,”

termination on a credible values,” and praised the he said.q