How VW turned from most loved to most hated in a day. And what to do.

Melbourne Herald Sun, Thursday October 1, 2015

In the past I've discussed handling the PR when someone shoots themselves in the foot. A sexist comment on a footy programme, a politician drunk in a strip club, or taking a helicopter to a barbecue. There are basic steps of openness, apology, fast response, a practised routine. But what do you do when your client treads on a land-mine that blows its legs off?

This is the situation of Volkswagen, gone overnight from rooster of the motor industry to despised feather duster. Their PR agency is Edelman, the biggest in the world with 5000 consultants in 65 countries. And you can bet that every one of them has been burning the midnight oil for the past two weeks, finally earning their fat retainers.

The error was supreme hubris. VW believed that they were so smart, no-one would suss that their emissions software was nobbled. And in fact all around the world, nobody did notice. Until a small body at West Virginia University wanted to prove how clean diesel had become. But their tests disagreed with all the official results from regulators.

When the testers asked the Environmental Protection Agency to examine their findings, the truth came out. In the software was a secret toggle that switched on when it recognised test condition, and off once the car was back on the road.

In this modern world, how anyone could believe they could keep secrets covered up for ever, is beyond me. Of course it will come out eventually. And American regulators do not like to be duped. Their anger can be measured in millions and billions of dollars, just wait and see. And every other regulator around the world is suffering the same indignation.

So what do you do? They admitted and apologised, as their PRs would have insisted. The CEO was dragged out and shot. No doubt there are purges coming that will make Stalin look like a softie. But they won't solve the problem of regaining the public's trust - even love - for Volkswagen.

Already there are campaigns being formulated that portray VW as green and good and a lifelong friend. The trouble is, every viewer will think, "Yes but - they're the ones who were willing to secretly pollute me". That 's going to take a long time forgetting.

There are in fact ways to improve efficiency and lower emissions, and they were considered. But, I have heard, they would have added some $500 to the cost of the car. A lot, in a very competitive market. But when you start looking at the penalties the Americans are talking about - $25 billion in fines, class actions by 11 million diesel users, prosecutions by France, UK, South Korea, Canada, not to mention Germany - it would have been cheap at twice the price.

They have to fix the problem, handle the recalls, swiftly and politely. Tell the truth on their web site and social media. Write humble letters to every VW owner, yes even the petrol ones. Here in Australia as in every other market, each CEO must face the public and explain. Yes they knew nothing about it but probably neither did big boss Martin Winterkorn but he still had to carry the blame. And until an awful lot of repair work is done, it will no longer be Das Auto but Das Betrüger (a very Germanic word for cheater).