'Das Auto' out: VW plans image offensive
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E-mail Shanghai Daily, December 24, 2015
VW's PR response in the first three months of the crisis drew criticism from regulators, customers and politicians. There have been several missteps.
On September 22, the company dismissed as "nonsense" a German media report that Winterkorn would be replaced by Mueller. The following day, Winterkorn resigned and Mueller was installed as his successor on September 25.
In November, its luxury Audi division denied that its three-liter models had been fitted with illegal software, only to admit three weeks later that in fact they had.
Three weeks into what has become known as ‘Dieselgate' VW communications staff began insisting media questions be submitted by email for consideration by teams that included lawyers as well as compliance staff. Often answers came back hours later or even the following day.
More recently the flow of information has improved, with Mueller and Chairman Hans Dieter Poetsch updating reporters for two hours on December 10 on the state of VW's internal investigations.
But it had taken VW almost three months to hold its first free-flowing news conference. Prior to that, Mueller had largely stuck to reading out carefully worded statements, departing without fielding questions.
Playing an advantage
One advantage of the long delay was that VW won time to come up with a forward-looking plan that it could present at the news conference, rather than having to dwell on its past misconduct.
"The earlier you communicate, the more backward-looking you have to be," said Katja Nagel, chief executive of Munich-based crisis communications consultancy Cetacea.
"To be able to look forward and talk about prevention of such cases in the future — this is a strong position to be in. To do so, you need time to substantiate your plans before publicly talking about them."
Sometimes haste can be counterproductive, such as when Winterkorn was forced out within a week of the US Environmental Protection Agency (EPA) revealing VW's admission. This left Mueller to pick up the pieces immediately, rather than having Winterkorn stay for a while to handle the fallout.
"They jumped on it a bit quickly by pushing Winterkorn out of the door, so the scope for him to take the flak was limited," said Robert Haigh, communications director at Brand Finance, a London-based brand valuation consultancy.
In PR terms, VW was on the backfoot from the outset, allowing the EPA to reveal its cheating, putting others in charge of the message.
Only occasionally did it show initiative. On November 3 — six weeks after the first revelations — VW volunteered it had discovered carbon dioxide emissions and fuel usage of up to 800,000 cars sold in Europe had been overstated.
It was later able to say that only a much smaller number of cars was affected and the cost could be relatively minor, in contrast to the figure of at least 2 billion euros (US$2.20 billion) it had first estimated.
VW said the initial estimate of 800,000 cars was a worst case scenario and it was able to reduce the number of affected vehicles following measurement checks.
This was a success under the rules of public relations; by initially estimating the costs of a setback at a high level, a company can subsequently present a lower number as good news.
But PR industry experts gave VW low marks for announcing that only a small group of employees had been responsible for the cheating without naming them — suggesting it did not yet know who they were.
VW has called in German PR firm Hering Schuppener, as well as Finsbury in Britain and Edelman and Kekst in the United States. But Bode made clear VW was still making the final decisions on crisis communications.
"What we also need is a view from outside. They are excellent sparring partners for us," he said.
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