Is playing by the book enough to save Volkswagen's reputation?

Volkswagen's reputation is in tatters after it apparently used technology to avoid compliance with US emission regulations. Laura O'Connell of Instinctif Partners suggests how the car maker can slowly repair the damage.

VW: Needs to act fast over the emissions scandal (Credit: dave.see on flickr)
VW: Needs to act fast over the emissions scandal (Credit: dave.see on flickr)

"We've totally screwed up," said VW America boss Michael Horn, while now former group chief executive Martin Winterkorn said his company had "broken the trust of our customers and the public". Is there any way back from such a low point of reputation?

The answer is yes, but only with immense commitment and integrity to putting right the wrongs and presenting a future vision that stakeholders can believe in. And, in this case, it may all be academic depending upon the scale of lawsuits brought.

The company has done the right things so far – apologised, announced an internal enquiry into what went wrong and sacked its chief executive.

However, this merely puts you at the start of the long road to recovering the reputation lost.

Stakeholders across the spectrum from consumers to investors and governments will each need phenomenally dedicated action to rebuild their trust. And the trust is not just related to the specific issue of manipulated emissions testing but the nagging doubt that all breaches of trust create: what else don’t we know about?

So first and foremost, the internal enquiry needs to turn over every single process that goes into VW’s manufacturing and marketing processes. To prove the firm can be trusted, they should also engage a reputable external source to verify their own evaluations and provide an independent assessment - and then provide a thorough, transparent and - above all - comprehensive report on what they find.

FIFA still does not seem to understand why it was criticised for only releasing part of the Michael Garcia report, but when your reputation is in tatters, nothing short of a complete confession will do. And full accountability needs to be accepted by those responsible – heads must roll.

VW simultaneously needs to announce convincingly what it will do to ensure that such a scandal is not able to occur again. New processes and controlling audits will be part of that. But so too will be embedding a culture of accountability and values that place the consumer first, throughout the whole company.

Beyond this, VW needs to earn respect by demonstrating that it does really place consumers first. For example, it should seek to put right the damaging perception that corporate greed has potentially affected the health of millions. The most dramatic way to show leadership would be a decision to end production of diesel cars. Diesel car sales are already in decline as doubts have grown about how polluting they are – to take a lead on cutting them from the roads would earn positive headlines and would challenge other manufacturers around the world to follow suit.

In addition, VW needs to ‘give back’ – this could encompass investment and campaigns to champion cleaner technology for cars, or scientific research into the impact of vehicle emissions on health, or investment in programmes to help those whose health is already affected by vehicle emissions.

Only time will tell what VW chooses to do, and whether it is enough. But one thing is certain, it does not have the luxury of much time to act.

Laura O’Connell is managing partner of corporate affairs at Instinctif Partners

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