Unethical Behavior by Volkswagen

Introduction

When the volkswagen got caught by the cheating the emission test, the impact on industry,economic,and corporate were huge and the consequences on health,environmental,legal, and volkswagen corporate were huge. But i hope volkswagen will be getting better by Recommendations for Sustainable Management.

Volkswagen was the best company to sell the car.

The Volkswagen was famous about the environmentally friendly ,high performance of diesel powered and efficiency of fuel.However, The West Virginia University students were studying volkswagen emission.

They found that When the emissions curbing system wasn’t running, cars emitted up to 40 times the amount of nitrogen oxides allowed under United States Environmental Protection Agency(EPA) Regulations. According to EPA , mostly ,engines are controlled by software. The engine is controlled by an computer manage System, the computer in the car that receives the signal from the driver via the brake and accelerator pedals. The NOx is produced via a react to between nitrogen in the air and oxygen at the high temperatures reach for combustion.

The diesel engine’s problem is that low NOx combustion conditions are at odds with combustion conditions to produce the maximum power of the engine and fuel efficiency. However, Modern engine use Exhaust Gas Recirculation (EGR) to reduce the NOx emission. Therefore, EGR has been used for a long time to meet strict emission standard. Volkswagen used EGR to reduce nitrogen oxides, but when Volkswagen was taken the emission test, the EGR was working well and when the car is on the normal road, it wasn’t working well by the report from The West Virginia University(2015) .

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This mean Volkswagen used the device immorally for better performance and profit. As a result, after the Volkswagen scandal, it has caused a huge influence and consequences .

According to Gallant (2016), the volkswagen scandal temporarily became less popular in the global car market. After volkswagen admitted the cheating on the emission test, a lot of part was impacted: auto industry,economic and volkswagen corporation. First, the impact happened in the auto industry.

After the EPA announced the EPA’s notification of Violation to Volkswagen, a lot of implication happened. Even the europe that is huge auto market and origin of volkswagen had underperformed the auto market, and the future of diesel car and an outlook for diesel car sales had also underperformed. (KOROSEC, 2015). Moreover, in the europe, many consumers were thinking that diesel car is uneconomic for consumers and auto companies with stricter emission standard in Europe and U.S.A. . TheBecause of the high levels of emissions that they produce, and diesel cars are already around 10-15% more expensive to insure than petrol cars (with adequate car insurance coverage being a legal requirement in most markets) making them generally more expensive for consumers to drive (Gallant, 2016)

Economy

The emissions scandal ensnaring German carmakers is a risk to Europe’s largest economy (BERLIN 2017).The car industry is Germany’s biggest exporter and provides about 800,000 jobs. And damage to the German economy would quickly impact a European Union that is heavily reliant on German leadership.(livin 2015).

Volkswagen corporation

• Stock value

Volkswagen shares lost almost a quarter of their value (September 21, 2015). The U.S. Environmental Protection Agency (EPA) (september 18, 2015) said Europe’s biggest carmaker used software for diesel VW and Audi branded cars that deceived regulators measuring toxic emissions and could face penalties of up to US$18 Billion. On 21 September 2015, According to statistics from the Frankfort Stock Exchange,after EPA announced the the EPA’s Notice of Violation to Volkswagen,share prices of Volkswagen fell 20% on the Frankfurt Stock Exchange.

• sale

Stock value: Volkswagen shares lost almost a quarter of their value (September 21, 2015). The U.S. Environmental Protection Agency (EPA) (september 18, 2015) said Europe’s biggest carmaker used software for diesel VW and Audi branded cars that deceived regulators measuring toxic emissions and could face penalties of up to US$18 Billion. On 21 September 2015, According to statistics from the Frankfort Stock Exchange,after EPA announced the the EPA’s Notice of Violation to Volkswagen,share prices of Volkswagen fell 20% on the Frankfurt Stock Exchange.

Consequences

Health consequence

• Death

According to A peer-reviewed study published in Environmental Research Letters (2015), nearly 60 people will die prematurely from the excess air pollution caused by Volkswagen cheating emissions tests in the US.

Non fatal health impact: In the US, according to the EPA(2015), affected VW vehicles were emissioning to 40 times as much nitrogen oxide (NOx) as they were supposed to. While that is most likely a pretty high estimate,it’s still a very big deal.

For one thing, NOx is a nasty pollutant that, in addition to occasionally contributing to a warmer planet, can exacerbate dozens of health conditions, including asthma, bronchitis, and emphysema.

• Environmental consequence

In 2016, nitrous oxide (N2O)accounted for about 6 percent of all U.S. greenhouse gas emissions from human activities. Human activities such as agriculture, fuel combustion, wastewater management, and industrial processes are increasing the amount of N2O in the atmosphere NOx these N2O contribute to acid rain, and visibly brown clouds or smog due to both the visible nature of N2O (EAP)

• Legal and financial repercussions

Government actions

United states According to the EAP(2015), U.S. investigators have identified 50,000 documents to prove emission scandal. Finally, Volkswagen admitted to their mistakes and agreed to a $1.5 billion civil agreement in 2016.

• south korea

In November 2015, after defeat devices had been found in some Volkswagen models, the Environment Minister issued a fine of ₩14,100,000,000(126,912.69 USD,2018 9/30) and ordered the cars to be recalled. As of 20 January 2016, the country’s environmental agency had filed criminal charges against VW, seeking up to $48 billion in penalties. Johannes Thammer, managing director of Audi Volkswagen Korea, was placed under investigation and faced up to five years in prison and a fine of up to ₩30,000,000 (27,002.70USD,2018 9/30).

• private actions

About 475,000 Volkswagen owners in the US can choose between a buyback or a free fix and compensation, if a repair becomes available. As of 30 September 2015 at least one investor lawsuit seeking class action status for holders of Volkswagen American Depositary Receipts had been filed in the United States seeking compensation for the drop in stock value due to the emissions scandal.

Effects on Volkswagen corporate

At that time, CEO Martin Vinterkoton was replaced by CEO because the company had a hard time finding its old reputation.Volkswagen called its former Porsche CEO Matthias Muller as its CEO in order to regain the credibility of the lost market and overcome the scandal. And Volkswagen is working on developing electric vehicles to overcome the diesel gate.

Reaction

• political:

Michel Sapin(2015), the French Finance Minister, called for an investigation of diesel-powered cars that would the entire continent of Europe. London Assembly(2016) member Stephen Knight suggested on 1 November 2015 that diesel vehicles should either be banned in the future, or face stringent tests before being allowed to enter London’s low-emissions zone.

• media:

The Volkswagen TDI emissions scandal has received widespread negative media exposure, with headlines fronting the websites of multiple news gathering and reporting organizations.The Volkswagen emissions cheating scandal has joined the ranks of other -gate suffix stories, with media coining both ‘dieselgate’ and ’emissions gate’ to describe it.

Recommendations for Sustainable Management

Volkswagen (VW) has traditionally been known as a quality brand of automotive organization; but now they will also continue to be recognized as a global company that willfully and consciously manipulated their car’s software to falsify data. They will be known as a company that deceived the U.S. government and the public regarding compliance with emission standards; however, they got caught and will pay a heavy price in managing this crisis. However, if all executives and corporations do that their managers and employees make ethical and sustainable decisions for their own long-term interest as well as those of the environment and consumers.Volkswagen will be able to regain reputation.

Conclusion

This investigation was done in order to studied and analyzed the volkswagen emission Scandal. Throughout this investigation, we can know Volkswagen’s behavior of cheating customers in order to survive the competition and to seek corporate profits . Also, We were able to recognize the strong responses of the government and individuals when the corporations deceive the customers. Therefore, i gave the Recommendations for Sustainable Management . This may not be the answer, but I hope the corporations will follow me.

References

1. University of California – San Diego (2017, May 23) Computer code that Volkswagen used to cheat emissions tests uncovered. Retrieved from https://www.sciencedaily.com/releases/2017/05/170523081855.htm
2. Goodman, L. M. (2016, May 08). Why Volkswagen Cheated. Retrieved from https://www.newsweek.com/2015/12/25/why-volkswagen-cheated-404891.html
3. Transportpolicy (n.d.). US: Light-duty: Emissions. Retrieved from https://www.transportpolicy.net/standard/us-light-duty-emissions/?title=us:_light-duty:_emissions#Tier_2
4. Ben Mullins (2018, March 20). The VW Scandal Exposes The High Tech Control Of Engine Emissions. Retrieved from https://www.iflscience.com/technology/vw-scandal-exposes-high-tech-control-engine-emissions/
5. Andrew, E. (2018, March 20). The VW Scandal Exposes The High Tech Control Of Engine Emissions. Retrieved from https://www.iflscience.com/technology/vw-scandal-exposes-high-tech-control-engine-emissions/
6. MacLennan, S. (n.d.). Institutional Investors – Schroders. Retrieved from https://www.schroders.com/en/us/institutional/insights/economic-views3/how-will-the-vw-emissions-scandal-impact-/
7. Cormack, L., & Hatch, P. (2016, September 01). ACCC takes Volkswagen to court over diesel emission claims. Retrieved from https://www.smh.com.au/business/consumer-affairs/accc-takes-volkswagen-to-court-over-diesel-emission-claims-20160901-gr61ud.html
8. Warden E (2018, May 17)Environmental Impacts of Volkswagen Emissions Scandal. Retrieved from https://earthtalk.org/volkswagen-emissions-scandal-impact