Critical Thinking (Case study) Volkswagen had a major push to sell diesel

Critical Thinking (Case study)

Volkswagen had a major push to sell diesel cars in the US, backed by a huge marketing campaign trumpeting its cars’ low emissions, the Environmental Protection Agency (EPA) discovered in 2014 that Volkswagen had deliberately installed cheating software in more than 500,000 diesel passenger cars sold in the United States. The software allowed the cars’ computers to sense when the vehicles were being tested for harmful emissions and to switch, undetected, to a driving mode that artificially reduced nitrogen oxide or NOx (linked to smog and lung cancer) so the cars could pass the test. Once back on the road, the computers adjusted the driving mode again, permitting drivers to experience the power and mileage the company was touting while allowing some cars to emit as much as 40 times the volume of pollutants permitted by law. Volkswagen had done the same in more than 10 million other cars sold around the world. The U.S. government’s case against VW resulted in a settlement of almost $15 billion and included massive repair and buy-back programs. Another $4.3 billion in civil and criminal penalties was levied against the company, some of which is to fund projects to reduce NOx in the air; eight high-ranking executives were charged with crimes, and two received prison sentences. The company lost more than a quarter of its market value as its stock price plummeted. How did a venerable and successful company come to commit what one business publication called “a truly brazen act of business malfeasance” in the first place? More stringent controls on NOx took effect in 1999, and of the two possible ways it could meet them, VW chose the one that did not require a costly reengineering of the interior of its cars. This might have seemed like the right business decision to make, but as a side effect, VW’s new NOx controls dramatically reduced the degree of fuel economy the company was advertising. It was apparently at this point that the decision to rig the cars to falsify emissions tests was made. Volkswagen’s financial performance has returned to pre-scandal levels even as the possibility remains that more huge fines will be levied, this time by European investigators. In early 2018, another scandal broke when the company was forced to apologize for exposing monkeys to engine fumes to research the effects of diesel exhaust. “We’re convinced the scientific methods chosen then were wrong,” said a company statement. “It would have been better to do without such a study in the first place.”