Opinion: Is ‘defeat device’ a problem for corporate culture?
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By Nickolas O’Malley
The recent scandal involving the German carmaker Volkswagen has far-reaching consequences for the environment. It sets a precedent not unlike the one set by BP in the aftermath of the Deepwater Horizon oil spill. BP had caused catastrophic damage to many ecosystems, yet they were allowed to recover with little more than a stain on their brand.
The U.S. Environmental Protection Agency (EPA) revealed that Volkswagen installed software in vehicles with an “EA 189” diesel engine that would cheat emissions tests. Most American cars run on gas fuel, but many cars around the world run on diesel fuel. While diesel engines are more efficient than gas engines, they often produce more harmful byproducts. When the car was undergoing tests, the device would alter the engine’s performance so that it appeared to give off far fewer byproducts than it actually does.
We’re seeing a dangerous trend in corporate culture: them portraying it as okay to destroy this planet if the outcome is cheaper production and higher profits. It’s one thing for a company to seek these things out, and it’s necessary for the health of any company. But to do it at the cost of our well being and the health of our planet is another thing.
Rupert Neate, shortlisted for reporter of the year at the 2012 British Press Awards, quoted a statement to The Guardian from the EPA.
“During normal operation, [the vehicle would] emit nitrogen oxides, or NOx, at up to 40 times the standard,” said Neate. These nitrogen oxides are the harmful byproducts that diesel engines produce a lot of.
He reports that Volkswagen has been accused by the EPA of using the device in 482,000 Audis and Volkswagens in the U.S. since 2008, according to The Guardian. He adds that in the U.S., the maximum fine for violating the Clean Air Act is $37,500 per vehicle, which puts a bill as high as $18 billion on the desk of Volkswagen’s accounting supervisor.
Naomi Kresge and Richard Weiss report to Bloomberg that Volkswagen lost 23 percent of its market value after admitting to their use of a cheat device. After a few press releases and a public speech, he gave in to his responsibilities as chairman of the board and announced his resignation. Whether or not he was aware of what was going on under his roof is beside the point. The fact is that a good leader ought to take responsibility for those he leads, and as expected he did just that.
I won’t even address the implications of him knowing about the existence of a “defeat device.” I’ll assume that he would’ve been outraged if that memo came across his desk. The fact that it was developed and used so extensively in the organization he managed deemed it his responsibility. He shouldn’t have blamed the “terrible mistakes” on a “few people” and stood his ground.
We’re not talking about some small blunder that caused a loss for shareholders—we’re talking about a serious scandal that reveals serious damage being done to our environment. Not only did it cause heavy financial damage to Volkswagen Group, but it reveals that they’ve been polluting our environment for years without public knowledge.
This isn’t just a problem for the future of Volkswagen. We’ve seen how BP managed to remain in existence after the Deepwater Horizon catastrophe, without suffering nearly as heavy of a financial loss as they ought to have suffered. History makes it clear that influential corporate entities can destroy our environment for the sake of gain and get away with it. They suffer great financial setbacks as a result, but they recover and remain in business.