Facts: In September of 2015, the Environmental Protection Agency (EPA) found that diesel Volkswagen cars being sold in the United States had a "defeat device" in its engines that detected the moment in which they were being tested (Moore, Faiola, and Horwitz). This device would then change the performance of the vehicle in order for it to appear having met all regulatory standards and regulations. Since the investigation ensued, the German car giant has come forward and admitted to cheating emissions tests in the US and deceiving the general public. In response to their newfound mistake, VW has stopped sales with this device instilled within them in the US. VW also claims that cars already purchased that have the software in them, will suffer no harm and thus require no immediate attention. In addition, the customers who purchased these vehicles were under the impression that VW vehicles met federal regulations for emissions, so much so, that they paid a premium for having “clean diesel” technology in their cars, adding to the slew of lawsuits and infuriation (Moore, Faiola, and Horwitz). Furthermore, even with the halting of diesel vehicles in the US, VW has openly admitted that over 11 million of their diesel vehicles have this “defeat device” worldwide, posing not only a problem for the US environment and EPA standards but also to the world (Ewing). While
Europe has emission regulations that are much laxer than that of the US, Europe and Germany alike are worried that this deceit causes a plummet in the economy as VW is a major contributor and generator to Germany and Europe’s automobile industry. Ethical Issues: In this case, the issue of honesty is the most prominent. VW knowingly created and installed this device with the purpose of deceiving its consumers and the EPA. Consumers rely on a corporation such as VW, to be honest, and forthcoming about the products. By VW deceiving its customers into believing they were purchasing a “clean diesel” vehicle and making them pay premiums for it, shows the lack of honesty and integrity VW has. Furthermore, their omission regarding the software to the EPA will inevitably hurt the general public as hazardous pollutants are being released by their vehicles. This, and much more, are all negative effects the dishonesty of VW has affected its stakeholders and the environment as a whole. Non-injury also plays a role as an ethical issue in this case. VW cars have been recorded to emit “nitrogen oxide at up to 40 times [the] federal standard” according to the EPA (Moore, Faiola, and Horwitz). This type of disregard for the safety of our environment and a willing contributor in the pollutants it emits are a prime example of non-injury. Additionally, the customers deceived by these “clean” diesel” vehicles
and forced to pay a premium for something they never received, have actual monetary damages, adding on to the reasoning behind the issue of non-injury. Lastly, fidelity is an ethical issue to consider in this case. VW is expected to be loyal to the government in which they do business as well as the government’s agencies and organizations. By being loyal, grateful, and respectful of the government, corporations such as VW are expected to follow the law and meet all federal standards and regulations. VW also has a great deal of responsibility to its consumers. Consumers expect VW to be forthcoming and honest in exchange for goods and services. That sense of fidelity is broken when VW knowingly and willingly evades the law, deceives its consumers, and damages the general public by having polluting vehicles in US cities. Stakeholders and How They Would View this Situation: There are various stakeholders, in this case, they include VW, the US government and its agencies such as the EPA, and VW’s consumers. Secondary stakeholders would be the general public of both the US and Europe, as well as the environment as a whole. VW is at the forefront of this case due to them being the ones who caused this case to come to fruition. It has been stated that VW admitted to their wrongdoing, however, while apologetic and
remorseful now, it may only be because they got caught. So, while they view this as an unfortunate and regrettable series of events, they did not view it as such when they decided to deceive the US government and VW customers. The US government and government agencies like the EPA are stakeholders that are greatly affected by the actions of VW. Laws and regulations such as the minimum standard of emissions are put in place to not only protect our cities and environment from pollutants, toxins, and smog but also to protect the general public that breathes that air. Therefore, it is safe to assume that the US government and the EPA both view this in a negative light, hence, their opening an investigation against VW and their deceit. VW consumers were led to believe that they were purchasing vehicles with “clean diesel” which they were obligated to pay for. They trusted VW and their compliance with US law to provide them with vehicles that abide by the laws and regulations of this country. Due to the monetary damages these customers suffered for paying for a service they never received, they are taking legal action against VW. These lawsuits are the indication that the customers view this situation in a negative light and want some sort of retribution for their losses, and rightfully so.
Secondary stakeholders would involve the general public and the negative effects this mishap has/had on the environment. The general public expects corporations to abide by that law set forth in order to protect their health. Meaning, that company that does emit pollutants follow legal regulations to keep the negative impact these pollutants have on the population and the environment to a minimum. While the environment cannot “view” a situation such as this one, it is still a stakeholder since it is being negatively affected by the carelessness of VW, in turn, that detrimental effect to the environment caused by careless companies such as VW have a negative effect on the population’s health. Causative Elements: According to Benjamin Zhang, a columnist for the Business Insider, the causes of this scandal are clear. According to Zhang, the newly appointed CEO Bern Pischetsrieder had a difference of opinion with one of VW’s corporate insiders, Martin Winterkorn, about the EA189 2-liter TDI engine, the “defeat device”. The current technology was simply not complying with federal regulations regarding emissions and Pischetsrieder was willing to follow through with this issue and perfect an engine that would meet all regulations. However, members of the board felt as though Pischestsrieder’s interests and delay in production would be detrimental to the success
of the business, and he was quickly let go from his position of CEO at VW. “When the dust cleared, Winterkorn was installed as VW Group's CEO. He immediately appointed the duo of Hackenberg and Hatz in 2007 to oversee the development of the EA189 engine that entered production in 2008.” (Zhang). It is during this time, that the cheat emissions software was installed in all of their diesel vehicle’s engines. It quickly became an asset to the company’s name and boosted VW to be one of the largest competitors in their industry. Unfortunately for VW, the EA189 engine that was originally coined as innovative, was discovered to be a fraud; a fraud not only acknowledged by authorities, consumers, and the public but also by VW, “the scandal was the result of a combination of individual misconduct and mistakes in one part of the business but also flaws in company processes and a tolerance of rule-breaking.” (Ruddick). Comprehensive Solution: “In the weeks since Volkswagen admitted to the US Environmental Protection Agency that his company cheated, the company has lost more than $30 billion in stock-market value.” (Zhang). This considerable loss in investments and revenue has led the company to make considerable changes and provide solutions in order to rectify the situation. VW has committed to recalling approximately 11 million vehicles that have been affected by this faulty device. While that is a
step in the right direction, VW owes much more than a recall and an apology. In addition to recalling 11 million cars affected by this fraudulent software, VW will also be giving the owners of these vehicles an opportunity to sell their affected vehicles back to VW, “…or to have the vehicle modified to meet emission standards. Consumers who have leased an affected vehicle will be allowed to cancel their lease agreements.” (Sorokanich). In addition, consumers who have filed suit against VW for damages will now be compensated for their initial premium payments for the “clean diesel” and other compensatory damages. In addition, VW will be obligated to establish a fund to remedy the excess of nitrogen oxide that was emitted due to their negligence (Sorokanich). In short, while all of these solutions have already been put into place to hold VW accountable for their actions, I agree with all of them. However, I would also add some fines to VW for breaking the law, both in the US as well as in Europe. While VW’s losses are considerable and their reputation has been tarnished as a result of their deceit, an example should be made of them by the governments allowing them to continue to function within their economic system. Deontologist:
Ross: This solution satisfies Ross’ deontological ethics because rectifying their mistake in this manner would mean that VW would be sharing a duty of reparation to its customers, the governments, and the general public. In turn, it would be rectifying the injustice they did to all of those parties; the violation of fidelity and honesty. And they would be making strides in the direction of self-improvement and rectifying their maleficence. This solution would satisfy Ross’ theory because it applies to and rectifies the duties that a deontologist should abide by. Kant: Kant would not agree with this solution because VW would not be abiding by these solutions out of a genuine moral act. Had they not been dishonest and deceitful, these solutions would not have to happen. However, VW is looking to repair their image and their pockets. Meaning, they are not doing this out of the goodness of their heart, but simply in hope to repair their damage and rid themselves of the stigma they brought upon themselves. VW did not act out on principle and initial duty, making this the scandal that it is today, so the solutions and reparations are not genuine and thus do not satisfy Kant’s ethics. Virtue: While the ethical theory of virtue would not agree with the negligence taken by VW, they would be in agreement with VW’s solutions in this case. All of the actions taken by VW to rectify their mistake is virtuous; they’re giving back to the community for the
environmental damages they have caused, and they are warranting damages to all consumers affected by their fraudulent engine. While their solution is virtuous, the causation of the solutions is not, making this a dilemma in it of itself. Utilitarian: From a utilitarian standpoint, this option would satisfy the masses. With the exception of VW, all other stakeholders would benefit from this solution, making it a perfect example of utilitarian ethics. While initially VW’s actions went completely against the utilitarian perspective, their solutions apply to it perfectly, because they would be making the consumers, the government, and the general public happy by warranting damages and funds in reparation for their fraudulent actions.
Works Cited Ewing, Jack. The New York Times. 22 September 2015. Website. 12 May 2016. Moore, Thad, Anthony Faiola and Sari Horwitz. Washington Post. 21 September 2015. Website. 10 May 2016. Ruddick, Graham. The Guardian. 10 December 2015. Website. 12 May 2016. Sorokanich, Bob. Road and Track. 21 April 2016. Website. 12 May 2016. Zhang, Benjamin. Business Insider. 7 October 2015. Wensite. 13 May 2016.
