Volkswagen, mired in a scandal since late last year over its admission that it placed "defeat devices" on diesel automobiles to evade emissions tests, began to turn the page on Tuesday, but at a very high cost. The German automaker agreed to a $15 billion settlement with authorities and customers, two-thirds of which will go towards buyback offers.
PRWeek asked several crisis communications experts what the company should do next to begin to restore its reputation.
Rich Tauberman, EVP and lead of crisis communications, MWWPR
This is a good first step in terms of trying to repair the reputation. It’s an incredibly large settlement, and I think it may help appease those that bought their cars. But there’s still a lot to be done. From a financial perspective, they seem to be doing the right things. Most importantly, they need to be and continue to be transparent — if not more so — about what happened. I don’t think I or lots of folks have the fullest understanding of who knew what, when they knew what, and why they did it. [Volkswagen needs to be] overly transparent in terms of how they communicate this settlement, as well as how much individual owners are going to get, and do a lot more mea culpas.
Dan Rene, SVP, Levick
A crisis can often be multiplied by a cover up — and a settlement is a big deal, especially for those conspiracy theorists that may be out there, not to mention competitors.
In the next steps, the company must be accountable and not be defensive of its behavior. Instead it should go on the offensive communicating its actions to show is has moved on, and finally, bridge to its record of customer satisfaction.
The alternative is to get mired in defending dieselgate, a no-win situation that will cause the company to continue suffering from the matter it settled.
Katie Sprehe, director of reputation research, APCO Insight
The first step is not to ignore the issue in communications; business can’t go on as if nothing happened. Following an event of this magnitude, there needs to be a story of how they are righting the wrongs, both internally and externally. The important thing here is to demonstrate and not tell.
Volkswagen should identify a positive and credible message to communicate to rebuild trust, and most likely that won’t be about eco-friendly products. If Volkswagen wants to put itself on a path to a better reputation, our research suggests that strong brands talk about how their business adds value to society. Their environmental message is forever tarnished, and subsequently Volkswagen is going to need to take a hard look at itself and redefine its societal value.
Ron Hutcheson, senior strategist, Hill+Knowlton Strategies
A damaged corporate reputation cannot be repaired with a legal settlement. The legal settlement seeks to address past wrong, but Volkswagen’s future depends on its ability to regain trust. That can only happen with full accountability and transparent, credible action to avoid similar behavior. The company needs to be clear on exactly what happened, hold people accountable for any wrongdoing, and implement reforms to make sure it never happens again. They can start by releasing the results of the Jones Day investigation.