Volkswagen’s master class in business ethics

Enrique Dans
Sep 19, 2015 · 2 min read

An investigation by the US Environmental Protection Agency (EPA) shows that the world’s biggest carmaker, Volkswagen, installed software in it vehicles to trick the routine vehicle emission control checks carried out by the organization

The software was able to detect when a vehicle was undergoing testing and would then drastically reduce nitrogen oxide emissions to meet the US standards. In regular traffic conditions, the vehicles’ emission levels would be up to 40 times higher than those allowed by the Clean Air Act.

The maneuver affects all diesel models of the Jetta, Beetle, and Golf models produced between 2009 and 2014, along with Passats from 2014 and 2015, as well as the Audi A3 from between 2009 and 2015. The company admits it installed the software and will now have to call in around half a million vehicles and fix the problem free of charge. It also faces a fine of up to $18 billion.

However, setting the emissions levels to meet EPA requirements will reduce the performance levels of Volkswagen’s cars, say experts in automotive technology.

The German car-maker’s actions are a flagrant breach of all business ethics: creating software sufficiently sophisticated so as to be able to detect when one of its vehicles is being tested for road worthiness, and to then switch its emissions down to meet legal requirements, and then, as soon as the owner drives it back out on to the road, resetting them so that the car performs better but pumps out 40 times the permitted amount defies understanding, effectively putting profits ahead of the public’s health, breaking the laws, contributing to global warming, quite honestly defies understanding.

It has to be said: it’s certainly an imaginative use of software. The EPA’s discovery leaves no room for doubt: this is not a bug or a problem that has been detected, but a premeditated act, and one that the company has already had to admit to. It had no choice: it has been caught red-handed. What’s more, this is no minor infringement: this is a major part of what Volkswagen does. Now, it has to face up to the reality that consumers know it is not able to compete in the marketplace except by cheating. Aside from the heftiest fine the EPA is able to impose, US courts should also sentence everybody involved in this vile scam to the longest prison terms the law permits — from the engineers and technicians who dreamed it up, to the members of the board that sanctioned it.

Congratulations Volkswagen: you’ve given new meaning to the term “smart vehicle.”


(En español, aquí)

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

Enrique Dans

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Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)