Some companies are known to indulge in skullduggery to boost their balancesheet and circumvent restrictive laws. Tax evasion is common. But it is rarely that renowned and respected global brands are caught cheating on a scale that can shake their foundations and shock the world. Volkswagen did exactly the same and is continuing to pay the price. The exact nature of the price will be known only in the coming months.
Volkswagen vehicles were found to have discharged emissions that far exceeded the required environmental standards, a worrisome news at a time when the world is grappling with the consequences of climate change. It was recently revealed that the German carmaker had taken illegal measures to ensure its vehicles passed the US Environmental Protection Agency’s emission control tests. This act betrayed consumers who are very concerned about environmental conservation. The shock was compounded by the fact that a German company indulged in this malpractice.
Volkswagen did the cheating by installing software in diesel engines that was designed to make vehicles’ emission levels meet the standard required by the US authorities — but only at the time of the emissions test. When the vehicles were driven on the road, the engines were reportedly found to discharge nitrogen oxide at levels up to 40 times the standard. Eleven million Volkswagen vehicles around the world have been affected by the test-rigging scandal, including its popular models such as the Golf. One reason for cheating was to boost sales in the US where the competition is very tough.
The scandal has made Volkswagen a tainted brand. Its shares crashed, sales were hit, customers became angry and are awaiting costly recalls and authorities are mulling ways to punish the company. Volkswagen Chief Executive Officer Martin Winterkorn resigned and said, “I am stunned that misconduct on such a scale was possible in the Volkswagen group.” But this is just tip of the iceberg it is facing. According to reports, the company may be fined up to $18bn, which would wipe out its profits. Other automobile brands under its wing also will be affected. VW has Audi, Porsche and other carmakers under its wing.
It’s not known if other carmakers too are indulging in similar misconduct and the possibility can’t be ruled out. The European Commission, which is the executive body of the European Union, called for its member nations to conduct a fact-finding survey based on suspicions that carmakers have also engaged in this malpractice. The wrongdoers are likely to be caught in the coming days.
VW officials have apologized profusely for all that had happened, but it will not help. The damage has been very huge, equivalent to a fatal crash•
Some companies are known to indulge in skullduggery to boost their balancesheet and circumvent restrictive laws. Tax evasion is common. But it is rarely that renowned and respected global brands are caught cheating on a scale that can shake their foundations and shock the world. Volkswagen did exactly the same and is continuing to pay the price. The exact nature of the price will be known only in the coming months.
Volkswagen vehicles were found to have discharged emissions that far exceeded the required environmental standards, a worrisome news at a time when the world is grappling with the consequences of climate change. It was recently revealed that the German carmaker had taken illegal measures to ensure its vehicles passed the US Environmental Protection Agency’s emission control tests. This act betrayed consumers who are very concerned about environmental conservation. The shock was compounded by the fact that a German company indulged in this malpractice.
Volkswagen did the cheating by installing software in diesel engines that was designed to make vehicles’ emission levels meet the standard required by the US authorities — but only at the time of the emissions test. When the vehicles were driven on the road, the engines were reportedly found to discharge nitrogen oxide at levels up to 40 times the standard. Eleven million Volkswagen vehicles around the world have been affected by the test-rigging scandal, including its popular models such as the Golf. One reason for cheating was to boost sales in the US where the competition is very tough.
The scandal has made Volkswagen a tainted brand. Its shares crashed, sales were hit, customers became angry and are awaiting costly recalls and authorities are mulling ways to punish the company. Volkswagen Chief Executive Officer Martin Winterkorn resigned and said, “I am stunned that misconduct on such a scale was possible in the Volkswagen group.” But this is just tip of the iceberg it is facing. According to reports, the company may be fined up to $18bn, which would wipe out its profits. Other automobile brands under its wing also will be affected. VW has Audi, Porsche and other carmakers under its wing.
It’s not known if other carmakers too are indulging in similar misconduct and the possibility can’t be ruled out. The European Commission, which is the executive body of the European Union, called for its member nations to conduct a fact-finding survey based on suspicions that carmakers have also engaged in this malpractice. The wrongdoers are likely to be caught in the coming days.
VW officials have apologized profusely for all that had happened, but it will not help. The damage has been very huge, equivalent to a fatal crash•
