Rough Week for Volkswagen CEO Müller

Rough Week for Volkswagen CEO Müller

January 13, 2016 — Volkswagen quickly is becoming a textbook example of how not to manage a PR crisis. This week — during the North American International Auto Show in Detroit, arguably the industry’s biggest stage — the bad news just keeps coming at the German automaker. What’s troubling is that Volkswagen is showing no ability to stop it. In fact, it appears its own actions continue to worsen the problems stemming from the revelation in September that it been cheating on diesel emission standards since 2005.

Meanwhile, Volkswagen CEO Matthias Müller made a major PR faux pas in an interview with National Public Radio Sunday evening saying the company did not lie about the emissions issue.Instead, the problem was a misunderstanding of U.S. law. Apparently, someone on VW’s PR team realized the potential fallout from Müller’s comments and convinced NPR to do a second interview in which Müller walked back the statements about not lying. He led off the second interview saying, “I have to apologize for yesterday evening because the situation was a little bit difficult for me to handle in front of all these colleagues of yours and everybody shouting.”

The initial interview were made following Müller’s remarks at the Volkswagen party Sunday evening. To be fair, there was a lot of noise and Müller was surrounded by several journalists trying to ask questions. Still, it’s hard not view the statement about not lying as Volkswagen’s continued inability to manage the PR side of the scandal.

It’s likely, the interview won’t help Müller who is scheduled to meet with EPA chief Gina McCarthy today along with members of Congress.

Meanwhile, the interview was just another in a series of events over the last week in which Volkswagen kept taking body blows.

First, last week the Department of Justice filed a civil lawsuit on behalf of the EPA against Volkswagen with fines exceeding $46 billion (read about the lawsuits details Here). It’s clear from the language in the lawsuit that the DOJ thinks Volkswagen continues to impede the investigation with “obstruction” and “providing misleading information.” Furthermore, U.S. authorities are growing increasingly frustrated that talks with the automaker regarding a potential fix have yielded little.

Following the lawsuit came the revelation that numerous state attorneys general had hammered Volkswagen for refusing to provide access to internal emails regarding the scandal, which again, creates the perception that Volkswagen is not being completely transparent, as it has promised it would be.

To top it off, yesterday the California Air Resources Board rejected Volkswagen’s initial plan it submitted in December to fix the affected 2.0 liter 76,000 vehicles in the state. Any fix that is approved would likely provide the template for repairing the more than 400,000 affected Volkswagen diesel vehicles in other states. Meanwhile, Volkswagen reportedly will submit a second plan today.

The automaker will learn in February whether CARB will approve its plan to fix the 85,000 3.0 liter diesel engines currently on the road.

This week’s developments are significant because they seem to indicate a fix may end up resulting in Volkswagen having to buy back thousands of vehicles, which would exponentially increase the final total of what the scandal will cost the automaker.

One of the big challenges for a fix is that Volkswagen has to show the adverse impact its repairs will have on customers wallets along with any reduction in vehicle performance.

What happened this week is not really a surprise. TBR wrote on September 25 just days after the scandal broke that there were no easy answers and that finding a solution would be difficult — Volkswagen — Questions, but Few Answers. 


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