The Volkswagen Scandal Referred To As ‘Hoaxwagen’ (Essay Sample)

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The Hoaxwagen
The Volkswagen scandal referred to as ‘Hoaxwagen’ emerged in September 2015 when the U.S. Environmental Protection Agency (E.P.A) detected, in a test on the car manufacturer’s purported ‘green cars,’ that the cars were environmentally unfriendly. The company's so-called ‘Clean Diesel’ models sold in the U.S. over a 7-year period (2008-2015) had a pre-installed software device with the ability to detect when being tested, and to change the car's emission performance accordingly (Smith and Parloff 1). It was designed to beat indoor emission testing for harmful emissions by relevant authorities such as EPA. The fact that the management of Volkswagen knew about the ‘defeat device’ for seven years, the size of the car market share controlled by Volkswagen, the financial implications of the revelation and the long-term effect that the scandal will have on the firm presents ‘Hoaxwagen’ as a mega-scandal in the car industry.
On an actual road, the car emitted over 40 times the permissible levels of the dangerous nitrogen oxides. Volkswagen has admitted to cheating, with over 500,000 cars sold in the U.S. and about 10.5 million cars sold worldwide, having the 'defeat device' installed in them (Smith and Parloff 1). The EPA discovery was followed by resignation by the CEO, suspension of some engineers, and apologies from top executives. The U.S. Department of Justice, state attorneys, the E.P.A, prosecutors in many affected countries, individual owners and many interested parties, have filed lawsuits against VW, worth billions of dollars (Smith and Parloff 1).
The installation of the ‘defeat device’ was motivated by the desire to increase Volkswagen's sales in the U.S. The U.S. is an expansive market but whose consumers, particularly the diesel engine consumers, are highly environmentally conscious. A huge marketing campaign and emphasis on low emissions by its cars were sure to capture the American market and increase sales, both in the short and long run (Hotten 1). The scandal was primarily financially motivated.
Furthermore, Volkswagen, Smith and Parloff (1) observe, is run like an empire. Its management, particularly under former CEO Ferdinand Piech maintained a ruthless, overweening culture where decision-making was in the hands of a few. Moreover, the firm’s power and influence have resulted in a culture of impunity, particularly in Europe. The firm could lobby the German leadership for help in cases where other European countries had imposed harsh, low-emission rules. Micromanagement, fueled by arrogance and ambition, implied success at all costs, including violating set rules and regulations (Smith and Parloff 1). Amid family power plays, ethical considerations were overlooked hence resulting in the scandal.
The scandal has short and long term impact on the giant car firm. In the short term, there has already been a change in management at the firm, with resignations, suspensions and apologies coming forth. Consumer confidence in Volkswagen brands has dwindled. The firm had the audacity and arrogance to run a commercial during the U.S. Super Bowl, illustrating their cars as extremely ‘clean.’ The firm is already recalling millions of cars worldwide this year to ‘fix’ the software. It has set aside over $7.3 billion to cover costs (Smith and Parloff 1). This will definitely result in financial loss.
Consumers can no longer trust car manufacturers' assurances on emission level...