Volkswagen CEO Martin Winterkorn, left, and Volkswagen branch head Herbert Diess. Photo / AP
Volkswagen CEO Martin Winterkorn, left, and Volkswagen branch head Herbert Diess. Photo / AP
Editorial
Mentality behind the ‘defeat device’ scandal reflects poorly on firm and Germany, and all carmakers now tarnished with same brush.
The many Golfs and Polos on the streets of Auckland's plushest suburbs speak volumes of the enviable reputation of Volkswagen's cars. Until this week, that is.
In one act of deliberate deceit, the carmaker has undone a sky-high standing based on technological excellence, efficiency and reliability. Not only has itscredibility been shattered by its cheating of United States emissions regulations, so too, even if to a lesser extent, is that of Germany itself and carmakers worldwide.
Germany sailed through the global financial recession in far better shape than the vast majority of countries. A major reason was the ongoing demand for vehicles made by the likes of Audi, Mercedes, BMW and Volkswagen. In troubled economic times, the production of high-quality items places a nation in a far better space than those that supply run-of-the-mill items.
It is carmaking that drives Germany's export economy. So much so that its enforcement authorities may well have had a lax attitude towards some of its activities.
United States regulators found half a million diesel-powered cars were fitted with illegal "defeat device" software. This switches off emissions controls when vehicles are being driven normally, only turning them on when they are doing emissions tests. The devices are designed to trick testers into believing the cars meet environmental standards. Damaging nitrous oxides which should have been filtered ended up, instead, in people's lungs.
The implications are many, but the most immediate damage is to Volkswagen's brand. This is the most precious of commodities because it encapsulates the value of a company and projects its identity to the world.
We can now see through Volkswagen's marketing and have a clearer idea of what values its brand actually represents. Clearly, these include a willingness to undertake calculated action to fool regulators whose job is to police the air we breathe. This at a time of increasing concern about the number of people dying worldwide from air pollution.
New Zealanders know something on this subject through our clean, green image. It underpins agriculture and tourism. Fonterra mishaps, most recently a botulism scare, have made the potential for substantial damage to that brand alarmingly apparent.
At least that scare proved to be a false alarm, and the backlash could be limited. The nature of Volkswagen's crisis is much worse, especially given its admission that as many as 11 million diesel cars worldwide may have been fitted with the software.
Obviously, this is not the way any business should operate. Volkswagen has no defence and, as a deterrent to others in the industry, must be severely punished after investigations by the US Justice Department and Environmental Protection Agency. Already, it has paid a cost in the tumbling value of its shares. The chief executive has resigned. And there will be other casualties.
The eco-friendly credentials of diesel technology are now open to question. Are its greenhouse-gas emissions actually lower than those from petrol engines? Or, as is claimed by some, have the tests for petrol-driven cars also been manipulated?
Volkswagen's malfeasance was not just about making money. It put lives at risk. For that, the polished image of Volkswagen and carmakers generally will never be quite as reliable again.
