Will Volkswagen’s Emissions Fraud Spur Reform in Europe?

Behind the carefully crafted images of a “greener” automobile industry – hybrids and electric cars, cleaner emissions, better mileage, less pollution – lies a dirty secret that was laid bare by the Volkswagen emissions scandal.

Volkswagen, as a corporation, really doesn’t care about the environment, and it apparently has nothing but disdain for emissions tests and other regulations. It is even willing to cheat to get around them. And it is hard to imagine VW stands alone in this regard.

The fraud perpetrated by Volkswagen cuts to the heart of our perception of big businesses and what we expect from them. Many loyal Volkswagen customers, some who won’t drive anything else, are shocked and appalled by the company’s behavior.

Fooling lawmakers is one thing. The perhaps unseen consequence here, however, is the likely perception among forward-thinking, progressive European customers who feel duped by VW. They thought they were driving relatively environmentally-friendly cars, only to discover the truth. Some probably feel like unwilling conspirators in VW’s fraud.

The Factors at Play

Unfortunately, the fraud perpetrated by VW was borne of two dynamics that are rampant at corporations all over the world: 1) an emphasis on earnings and the “bottom line” above all else; and 2) the lack of an ethical culture to guide the company’s direction.

This predictable result was allowed to fester in a European market that has arguably not been tough enough on its automakers. One of the largest business lobbying groups in the continent, automakers have routinely fought against stiffening regulations and testing in an effort to keep costs down and remain competitive in a cutthroat industry.

In fact, according to the New York Times article “Volkswagen Scandal Highlights European Stalling on New Emissions Tests,” just last month a German member of the European Parliament proposed exempting an entire class of vehicles from auto emissions standards. From where did the proposal originate, lawmakers wondered? Volkswagen.

The NYT article describes how European automakers on the whole have lobbied hard for decades to resist stricter testing measures. As it stands now, the tests are easy to manipulate – though it is unknown as to whether other companies have taken the outrageous step that Volkswagen did by designing and installing special software to provide false readings. Previous mentions in reports of tools known as “defeat devices” would indicate that such cheating, at least in principle (if not by the exact method of VW) is probably widespread.

The Road Ahead

It is a bad situation for those who support the restrictions and value the health of the environment. Yet now, it is out in the open – which could spur some serious backlash against automakers. Volkswagen is already seeing it, facing customer complaints along with investigations and certain penalties. And at the risk of sounding melodramatic, having such corporate treachery laid bare could be difficult to overcome in the theater of public opinion.

The result may be support for restrictions and testing methods far more stringent that those that VW and other Euro carmakers were resisting all along. It is likely that auto executives in suites all over the world are cursing VW, or perhaps just bad luck, with these developments – at least in terms of how it may affect the European market.

Volkswagen got caught. For the auto industry in Europe, things may never be the same.