Can carmakers regain our trust?

The Volkswagen diesel emission crisis has produced the usual doomsayers who predict the company can’t possibly survive. But perhaps they are confusing whether we trust VW with whether we will buy one of their cars.

Our trust in carmakers has certainly taken a hammering recently. In 2014 we learned that GM waited for 11 years before starting to recall millions of cars with an ignition key fault linked to 124 deaths and hundreds of injuries. New CEO Mary Barra said she did not want GM to “move past” the scandal or “put it behind” the company. She did not want this to be a bad memory that fades into the background. Instead, she said, she wanted the scandal to remain a constant reminder of what happens when people don’t do the right thing, and use it to change the culture of the company. No wonder Forbes Magazine dubbed her “Crisis Manager of the Year.”

Compare that with VW CEO Martin Winterkorn, who said he was “endlessly sorry” and resigned, but claimed he knew nothing about it and had done nothing wrong. As he slips away into obscurity – on a pension reported at one million euros per annum – perhaps he will have plenty of time to think about the difference between an apology and actually being apologetic.

For some managers, step one on page one of the crisis manual is find someone deep inside the organization to blame, then sacrifice them for the good of the brand. In the case of VW, the emission defeat debacle has been blamed on two software engineers who supposedly rigged the whole thing without anyone else knowing. Yet even the US head of VW Michael Horn admitted before Congress that he found that excuse “hard to believe.” If the company can’t believe it, why should the rest of us?

Unsurprisingly there’s been the usual conga-line of self-proclaimed experts predicting the end of the VW. However these earnest folk seem to have forgotten the equally certain predictions that the Toyota would never survive the ‘sudden acceleration’ crisis in 2010, or at the very least that Toyota would have to change its name. Not true of course. Toyota rapidly recovered lost sales and within twelve months regained its ranking as the world’s most valuable automotive brand.

With the market value of VW down by one third, and savvy investors now buying the company’s shares as an apparent bargain, my guess is that so too will some smart consumers buy VW cars at a time when their popularity wavers and price softens. The combative former Chairman and CEO of ExxonMobil Lee Raymond is supposed to have told colleagues that “people hate us, but they are going to keep buying our product.” It’s unlikely VW would express it so bluntly, though there’s no doubt VW are playing the long game. They appear to be betting that customers will eventually come back to buying their cars, even if they don’t quite trust the carmaker. My money is on VW to deliver that bet, and thrive in the long run.

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About managingoutcomes

Issue and crisis management expert
This entry was posted in Crisis management, Reputation risk and tagged , , , . Bookmark the permalink.

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