VW tries to recover from scandal, embarrassment

We very often hear of scandals that companies find theirselves in, which put their entire business at risk. Whether is be the banks on wall street, or Subway having to apologize for their longtime spokespersons legal issues, it is something that we all can learn from. In business, not everything goes the way as planned. So, it is important to know how to dig yourself out of holes that you may encounter.

Volkswagen is one of the most recent cases relating to this subject. In september, the EPA discovered that many VW cars being sold in the U.S. had a software in their diesel engines that could detect when they were being tested, and would then change the performance to adhere to the EPA's standards. Long story short, they cheated on emissions tests.

VW now has to recall 8.5 million cars in Europe and 500,000 in the U.S. as a result. They are also facing up to 18 billion dollars in penalty fines.

The company has admitted to "breaking the trust" with their customers, and has since apologized for its actions. Obviously that isn't enough, especially from a major player in the automobile industry. They now have a long road ahead of them to try to improve their reputation, and gain their strength back in the market.

From a marketing standpoint, this is a disaster. VW has recently launched a campaign to provide a "goodwill package" for their affected customers, which includes a $500 prepaid visa gift card, and a $500 dealership gift card, along with 24 hour, no charge roadside assistance for 3 years.

This story is just an example of how wrongdoing in the business world has major consequences, and even though taking shortcuts can lead to success in a lot of situation, eventually it will catch up to you.

by Jack Denison

Sources:

Hotten, Russell. "Volkswagen: The Scandal Explained - BBC News." BBC News. BBC, 4 Nov. 2015. Web. 15 Nov. 2015. <http://www.bbc.com/news/business-34324772>.

Schultz, E.J. "Volkswagen's New Ad: 'We're Working to Make Things Right'" Advertising Age CMO Strategy RSS. Advertising Age, 15 Nov. 2015. Web. 15 Nov. 2015. <http://adage.com/article/cmo-strategy/working-make-things/301365/>.