A well-known example of a famous crisis communication failure is the 2015 Volkswagen (VW) emission scandal (also known as “Dieselgate” or “Emissiongate”). VW was caught by the Environmental Protection Agency (EPA) manipulating its engine controls to pass laboratory emission tests – in direct violation of the Clean Air Act (Jung and Sharon, 2019; Bez, 2016).

Dealing with an uproar from both stakeholders and customers who felt their trust had been violated, the situation was made worse by the company’s inconsistent, contradictory, and, at times, lack of public messaging (Hakim, 2016).

Even once the affected vehicles had been recalled, consumers continued to report that the company was being dishonest and not fully accepting responsibility for their actions. Media outlets across the world quickly picked up the story, publicly shaming VW for their actions (Bez, 2016).

A study of Twitter discussions found that “Volkswagen’s tweets were not able to reduce the emotionality and sentiment of the ongoing Twitter discussion…even during quiet phases, the communication remained rather negative” (Stieglitz, Mirbabaie and Potthoff).

As of October 2020, Germany’s DAX index is similar to September 2015 (when the scandal broke), the S&P 500 is up by 68%, and VW stock is sitting at approximately 35% below its pre-scandal price - a testament to the possible lasting implications of a crisis (Colvin, 2020).

VW chose to stop marketing posts on social media the day the scandal broke and created a website to provide information and a contact place for customers regarding the scandal. However, upon reflection on the crisis and VW’s response, there are a number of things that were handled incorrectly, or at the very least could have been managed better including:

• VW was not able to get ahead of the scandal. VW engineers admitted on September 3, 2015, to the EPA that several diesel cars had been tampered with (Department of Justice, 2016). The news became public on September 18, 2015, when it was disclosed by the EPA – sufficient time for VW to have foreseen the situation and disclosed their error first.
• When the news broke, VW did not appear to follow a well thought out crisis communication plan. The response was inconsistent and often highly flawed.
• There was limited engagement with customers and the public (including on social media); most communication directed people to the new website. However, once arriving at the site, users reported being disappointed with the information provided saying it was not up to date or helpful.
• Overall, VW was not transparent with its customers and stakeholders. They did not clearly communicate to their audiences what had happened, which models were affected, or what the solution/fixes would be. This only served to add to the public distrust in VW.

References

Bez, A. (2016). Volkswagen Dieselgate: An Analysis of Volkswagen AG's Crisis Communication as a Response to the Emissions Scandal from 2015 (Doctoral dissertation, University of Southern California).

Colvin, G. (2020). 5 years in, damages from the VW emissions cheating scandal are still rolling in. Fortune. Retrieved from https://fortune.com/2020/10/06/volkswagen-vw-emissions-scandal-damages/.

Jung, J. C., & Sharon, E. (2019). The Volkswagen emissions scandal and its aftermath. Global Business and Organizational Excellence, 38(4), 6-15. https://doi.org/10.1002/joe.21930.