It’s a tale as old as time: corporate greed — and unchecked power — drives corrupt behavior, resulting in public outrage and expensive lawsuits. As that old song goes, “When will they ever learn? When will they e-e-e-ver learn?”
Apparently never, because last week brought the news that German automaker, Volkswagen, used sophisticated software to cheat U.S. EPA emissions tests on an estimated 11 million of its diesel cars. This is a scandal of epic proportions that has rocked the U.S. and Europe and has threatened to destabilize the German economy. Even the company’s CEO has stepped down, though he claims no knowledge of any misdeeds (of course not). Could this possibly be true? Only time will tell. The fact remains that Volkswagen has done irreparable harm to its brand – one that, until now, has enjoyed a sterling reputation as both economical and trustworthy.
Forgive yourself for rubbernecking, for it’s altogether warranted. In terms of reputation, this is a four-car pile up – carnage everywhere, with the Volkswagen image splattered in little, tiny pieces. Decades of hard work—and advertising dollars— have gone into building the brand, transforming it into the economic stalwart that it has become. Famous for some of advertising’s most memorable campaigns featuring clean, hip, and quirky creative that touts an economical and efficient product, all of that has come crashing down. Consumer trust has plummeted overnight, and it’s now up to a new CEO and crisis management team to do what they can to pick up the pieces of a broken brand. Will they succeed? We think so, but it will be a long, uphill battle, and Volkswagen may never again achieve the type of success that once made it a brand worth following.