News came out this week that VW engineered its software to evade emissions tests. The vehicle can detect when it’s being tested, to reduce emissions to allowable levels. As soon as the test is over, under real driving conditions, emissions are 30 or 40 times higher.
Volkswagen has acknowledged that similar software exists in 11 million diesel cars worldwide. The CEO has resigned.
This scandal hurts the reputation not only of VW (which also owns Audi, Porsche, Lamborghini, and Bentley), it hurts the reputation of Germany. When we think “German engineering,” we’ve historically thought of reliability, precision and performance. Now we may be more inclined to think “sneaky” or even “dishonest.”
When our teenagers misbehave, we often are tempted to say “what were you thinking??” Psychologists tell us that this is unhelpful. The teen brain is not fully developed, so teens actually can’t think ahead to anticipate the implications of their actions as well as adults can. But VW is a full-grown company.
We also say to our children “Don’t cheat, because you’ll only be cheating yourself.” In this case, VW cheated its employees, its customers, its shareholders ($26 billion in share holder value was erased this week), its country and people everywhere who’d like safe, clean air to breathe.
I don’t know how much the departing CEO, Martin Winterkorn, knew about VW’s software, which so stealthily cheated on emissions tests. As a top leader, you can’t know everything your employees are doing.
But the CEO is responsible for his company’s culture. He exemplifies the values that guide that culture. He should set clear expectations for fair-play and honesty.
And he clearly did not do that; at least, not well enough. When groups of very smart people work together to cheat the system, as it appears VW engineers did, it’s a symptom of deep cultural rot within a company’s soul.
Winterkorn has stated that he is “endlessly sorry” and asks for “trust on our way forward.”
That trust is going to take a long, long time to rebuild.