It may be a long road to recovery for Volkswagen after the PR car-crash that has unfolded in the press over the last few weeks. A number of commentators have drawn comparisons with BP’s Horizon Deepwater spill, in terms of the environmental impact and the anticipated financial penalties, but the two crises differ in at least one important aspect.
Regardless of liability, it’s fair to assume that BP never intended for its oil spill disaster to happen. VW’s actions, on the other hand, suggest intent to mislead, which is even harder for consumers to forgive and forget. It used software engineering to cheat the system and avoid having to meet exacting environmental standards, while continuing to portray itself as a leader in sustainability. The result is substantial damage to the brand’s credibility and a breakdown of trust between VW and its stakeholders.
What’s more, the fallout extends beyond VW itself. Its emissions admissions are a huge embarrassment and cause for concern across the motor industry as a whole, and especially for the regulators that should have made such practices impossible. An apt comparison is the 2013 horsemeat crisis, which rode rough-shod over our expectations of food safety. Just as we expected food manufacturers to provide filly-free microwave lasagnes that correspond to their listed ingredients, we expected our cars to perform as advertised. Now we can’t be sure of either, and that’s a problem for both respective industries.
During horsemeat-gate, it was Tesco that bore the brunt of the bad press in the UK, even though it emerged that many other supermarkets and suppliers were implicated. Interestingly, the affair provided a welcome boost for Morrisons, which came through that particular scandal unscathed due to the effective management of its supply chain and won consumers’ confidence thanks to its strong focus on sourcing direct from local farmers.
There are rumours in this case that VW may end up being the first in a long line of car manufacturers involved, but either way, it’s more than likely that VW will remain the Tesco of this affair. Both are well-established household names that espouse family values, and for that reason their misdemeanours earn them more negative column inches and stick in the public consciousness for longer.
So where should VW start with the repair job on its reputation? There are a few basic steps that it might want to consider:
• Mirror: demonstrate that it has reflected on where it went wrong and learnt lessons
• Signal: indicate a willingness to rebuild stakeholder relationships and trust. This requires honesty and transparency in ongoing communications
• Manoeuvre: act decisively and implement changes, showing strong leadership and creating confidence that the company is doing things differently (and better). This will require VW to demonstrate a genuine commitment to sustainable values from now on
It looks like this story is set to roll on for some time yet. I’ll be following with interest to see how soon VW can clear the air with its customers (pun intended).
Natalie Williams, account manager