If you hadn’t already shorted your VW stocks after the diesel scandal last year, now would be the best time to do so: VW just lost the only person who was doing everything right in the aftermath of the scandal. In his position as VW of America president, Michael Horn was popular among the plagued dealers for his straight talk, apologetic to the public and influential enough at the German headquarters to push for the right products. But last week VW issued a statement that Horn, is departing “by mutual agreement” to pursue other interests, effective immediately. Such a sudden departure by someone who has worked for the company for more than 25 years, this statements sounds like a euphemism for “he didn’t do what the company wanted him to do, so we fired him”. Update: according to Reuters, VW offered Horn “other positions within the company”, which he declined. In other words, VW of Siberia is still looking for a new Product Manager Eos and Golf cabriolet. Horn’s departure is very bad news for a company that desperately needs a person who was doing exactly those the things he was known for during the current slowdown in US sales at the Volkswagen brand and inability to reach a deal with US regulators or a technical solution to fix the illegal emissions software in about 600.000 VW Group cars.
Scrambling to recover from the self-inflicted Dieselgate, VW is announcing changes left, right and center. We’ve already heard of Winterkorn leaving, reduced spending and possible cuts to model ranges, leading to speculation as to the future of white elephants such as the VW Phaeton and Bugatti Chiron. Well, now the news is that not only VW will bring both models to market, but that it will actually crown the Phaeton range with an all-electric model (cue stories of yet another “Tesla fighter”).
Bart has been encouraging me to write my own take on VW’s diesel scandal, but that’s been proving hard since his take on the issue pretty much was all that I could have been hoping to say. So instead of writing a long article, I figured I’d ask you all what you think, and then share a few thoughts I have on the subject matter.
1. VW is guilty…
It is important to admit as much before we go digging further. Yes, other carmakers could be doing the same and yes, the fuel consumption/emissions testing regime is not without fault. But at the end of the day the fact remains that VW did, knowingly, install software to cheat on an emissions test meant to prevent pollution which causes serious health issues.
A lot has been written about the Volkswagen diesel emissions scandal that’s been uncovered in the US. But not yet here on Left-Lane.com. That’s not because we’re secretly supporting VW and refuse to write anything bad about them. It’s because we refuse to just republish news stories that you can find elsewhere on the internet. Left-Lane aspires to offer its readers unique content that you will not find elsewhere. And since I (Bart) have been very busy with other obligations the past few weeks (as you may have noticed, while Krzysztof and Rutger have been very busy, I haven’t published any articles in 3,5 weeks), I haven’t had the time to sit down and contemplate our angle on this perhaps industry-changing matter. Quality goes before quantity, so I hope this article meets your expectations. If so, or if not, please post your comments below. Thanks!
Volkswagen is facing serious trouble in the US and worldwide after admitting it had misled US regulators by installing “cheating software” designed to make sure the cars emit much less nitrous oxide (NOx) during the standard testing procedure than they actually do in real life. Besides facing a hefty fine of up to $18 billion (but probably much less than that maximum figure) VW can expect just in the US, the fallout from a marketing and image perspective is potentially many times worse if the company doesn’t act swiftly and firmly to restore confidence in the brand.
Let’s hope confidence in the automotive industry also remains intact, after Toyota’s unintended acceleration safety failure, GM’s faulty ignition switch scandal (see a trend here with companies trying to become the biggest in the world?) and the recent scandal with Takata airbags.
But is VW the only one to cheat in emission tests?
No matter how incredibly and unforgivably wrong Volkswagen has been in this matter, I refuse to believe they are the only manufacturer to manipulate its software or other parts of their vehicles in order to perform better in fuel efficiency or emission test procedures. They were simply the first ones to get caught and have therefore been made into the piñata of the automotive industry. What this whole scandal may have actually done is lay bare the issues with testing procedures that are too far off reality and which can be too easily manipulated. The big drop in share prices across all major automotive OEMs, though not as badly as the drop in VW shares, signals that investors also believe Volkswagen is not alone in this and the industry as a whole may face tough times ahead. [Read more…]