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Running Head: VOLKSWAGEN “DIESEL DUPE”
Public Relations Case Analysis Report: Volkswagen “Diesel Dupe”
Keila Dukuze
Texas A&M University – Corpus Christi
Author Note
Throughout this case report I will introduce course material from my Public Relations case and
strategies class that was taught by Professor Michelle Maresh. I’ve made efforts to show how
this case presents different public relations topics such as; investor relations, consumer relations,
community relations and employee relations. Majority of my findings presented in the case came
from CNN reports, financial news reports and blogs.
Running Head: VOLKSWAGEN “DIESEL DUPE”
On September 18 2015 Volkswagen known as the world’s largest automaker was caught in a
storm of a major company crisis over its rigging of diesel engine emission tests not just in
America but in Europe as well. An article by Rishal Chudhary (2015), “Volkswagen is being
dubbed the diesel dupe” (Chudhary, 2015)! EPA (Environmental Protection Agency) found that
Volkswagen cars being sold in the US intentionally had devices in their diesel engine that could
detect when they were being tested and if the device can detect when the car is being tested then
it could change the performance accordingly to improve results. This is Fraud on the part of the
company because the use of a device that would skew results to show that their diesel engine was
getting great gas mileage to up their sales is disrespectful to their Volkswagen customers. What’s
worse is that Volkswagen owners are now returning their cars but won’t get a fair trade. For this
reason Volkswagen should implement PR strategies to solve the crisis and save their companies
integrity.
Case Background
Why would a device that interferes with test results effect everyday drivers on the road?
According to the EPA while the device is being tested it puts the vehicle into a safety mode
where the engine runs below normal power and performance. Then once on the road, the engine
switches out of test mode and starts to emit nitrogen oxide pollutants up to 40 times above what
is allowed in the US. This case can be considered a community relations case because faulty
Volkswagen cars can be a danger to the environment and individuals in a community. According
to Wilbur J. Peak (1998) “Community relations as a public relations function, is an institution’s
planned, active, and continuing participation within a community to maintain and enhance its
environment to the benefit of both the institution and the community”(p.114). A CDC (center for
disease control) report on hussgroup.com listed out the various health and environmental effects
Running Head: VOLKSWAGEN “DIESEL DUPE”
nitrogen oxide can have on a community. The health effects include the following: airway
irritation, breathing difficulty, skin inflammation, increased respiratory illness, and permanent
lung damage. The environmental effects include: damage to sensitive plants, impact on urban
vegetation, and reduced forest growth.
In light of these findings the German car company has admitted to cheating emissions in the US,
and is now under serious investigation. “Consumers who bought Volkswagen vehicles that had
false emissions information, are now examining their rights as the once respected company
battles a crisis that casts doubt on the integrity of the entire auto industry” (Ridley & Cruise,
2015). The consumer is very important when it comes to this organization and how they will
bounce back. Since the crisis Volkswagen has confirmed that they will start recall on vehicles in
January of 2016 in Europe, as for the USA the date hasn’t been set yet. Volkswagen will recall
8.5 million vehicles in Europe 500,000 in the US 2.4 million in Germany 1.2 million in the UK
and 1 million in France a rough total of about 11 million vehicles. The following are statements
made by Volkswagen customers about this recent crisis. Dr. Mendoza an Allergist stated “There
was a sense that we were doing the world some good," to have it flip 180 degrees is just
shocking. I haven't computed the cost to society now that I'm spewing out nitrous oxide but it's
definitely an ironic twist." “It was my car and something I loved”- Kristen Taylor.
In relation to consumer relations, Volkswagen car sales in China went from surpassing Toyota
sales globally and since the scandal they have taken a huge hit in the stock market. Something
unexpected yet not surprising Germany has to make a lot of financial cuts and some of those
include their spending on sports one mainly Soccer, but for obvious reasons and the most
important group being affected by this would have to be Volkswagen. The company has been
stripped of two green cars of the year titles and the EPA could fine up to 37,500$ per car that’s
Running Head: VOLKSWAGEN “DIESEL DUPE”
recalled, on top of the already 6.5 billion dollar budget to recall vehicles in the US. Martin
Winterkorn the CEO of Volkswagen is stepped down on October 31st after the company had
admitted to the diesel rigging. When news broke of the company’s crisis shares of Volkswagen
plummeted to 30%, but since Martins departure the company has slightly rebounded its stock.
This scandal has affected investor, and employees. “The biggest suffering is the 40 Billion dollar
lawsuit from some of the world’s top firms like Quinn Emmanuel who has won almost 50 billion
dollars for clients such as GOOGLE, FIFA AND SONY” (Tovy & William, 2015). When it
comes to the investors of Volkswagen there is little trust between the organization and its
stakeholders, because this crisis happened immediately there was not much time to let everyone
know. Jones Day law firm conducted an internal investigation into Volkswagen and suspended a
couple of the organization’s employees. During the investigation Michael Horn the company’s
