Communications consultants comment on VW’s response to crisis
Unsurprisingly, Volkswagen is the subject of the Wall Street Journal’s “Crisis of the Week” column, in which experts comment on companies’ responses to bad news. Communications consultant Andrew Hennigan summarizes VW’s problem: “Typical automotive scandals are usually the result of incompetence aggravated by a bungled cover-up. VW’s problem appears to be the result of a premeditated design decision….”
Hennigan calls VW’s initial statement that it “…takes the matter very seriously…” is meaningless and typical of statements issued for compliance rather than conveying information. More effective was Volkswagen USA CEO Michael Horn’s comment that “…we have totally screwed up…”—showing that the company understood the seriousness of the situation.
Ira Kalb, assistant professor of clinical marketing at the USC Marshall School of Business, writes, “Volkswagen evaded regulators and deceived the public regarding the emissions of its diesel vehicles by employing a ‘defeat device.’ Because this was a deliberate deception that endangered public health and violated its ‘clean diesel’ branding, Volkswagen seriously compromised its integrity.”
Kalb adds that replacing CEO Martin Winterkorn with Porsche CEO Matthias Müller may not be effective because Müller is an insider facing an uphill battle.
Nevertheless, Jennifer Vickery, CEO of National Strategies Public Relations, calls Winterkorn’s resignation a “no-brainer,” but VW remains in trouble.
She writes, “To really fix things, the company is going to have to communicate in a new way. It should break things down, step-by-step, in terms of where they are in the investigation and correction of all internal corruption. It must be as public as possible, even using social media and media airtime purchases, to reach the public.”
That approach may not be popular with stakeholders, she writes, who typically want companies to communicate positive news only. “However,” she concludes, “with an issue of this size and of this type of deceit, it is going to really need to communicate more openly than they might want. It needs to comply with the EPA, take action, investigate hard, prosecute harder, and be open every step of the way.”
Meanwhile, in the article “Volkswagen CFO Is in the Hot Seat,” the Journal takes a look at chief financial officer Hans Dieter Pötsch, who “…confronts the daunting task of determining how much money VW will need to fix the millions of cars involved and to finance fines and settle legal claims against the company.”
VW has took a $7.3 billion charge to cover some costs related to the scandal but faces as much as $18 billion in fines from U.S. regulators alone.
