Howes: VW’s ‘trust’ campaign touts ‘vital’ U.S. market

Daniel Howes
The Detroit News

If nothing else, Volkswagen AG executives know their talking points cold.

“We have to get back the trust of our customers, our dealers and, of course the authorities,” CEO Mattias Müller said Monday at the Detroit auto show. “We do this today, we do this tomorrow; we change our rules, our processes.”

“Our most important goal for 2016 is to win back trust in our brand,” said Herbert Diess, chairman of the Volkswagen brand. “We are creating a new Volkswagen. Winning back trust also means improving our strategy in the U.S. America is absolutely vital to our future.”

Really? The German automaker tarred with a diesel scandal that has damaged its reputation and could cost it and billions in fines, repairs and litigation, has a funny way of showing it. Blanketing the North American International Auto Show with mea culpas doesn’t change facts, assuage lawyers or materially alter the posture of federal regulators:

The company claiming to deliver “Clean Diesel” to sophisticated Western markets conspired to deceive customers, dealers and regulators into thinking the engineering geniuses in Wolfsburg cracked the diesel code its rivals simply could not. No, they cheated.

Nor does it change the fact that the VW brand’s history in the United States is a history of failure, the iconic Beetle partially excepted. Where American and Japanese rivals flooded the market with the SUVs it craved, VW dallied, causing its brand to lose ground and cachet.

Is U.S. ‘absolutely vital’?

Where VW’s sister Audi brand embraced its Teutonic roots to turbo-charge U.S. sales — doubling sales from 2010 and last year hitting its target of 202,000 vehicles sold a full five years ahead of schedule — VW Americanized its Passat midsize under the mistaken impression consumers here would respond. Not so much.

Where CEOs from rivals General Motors Co. and Toyota Motor Corp. personally testified to Congress in attempts to atone for the scandals that slammed their brands in 2014 and 2010, respectively, VW dispatched its head of Volkswagen America to parry congressional shots. The big boss was too busy at headquarters in Germany to make the trip.

Odd, that, in a market that is “absolutely vital” to the fortunes of a German automaker pushing to dominate its world until the diesel debacle derailed its ambitions and laid bare the arrogant deceptions that will not be easily forgotten by the customers, dealers and regulators stung in the process.

The campaign of contrition does not erase the fact that the company claiming to deliver “Clean Diesel” to sophisticated Western markets gamed California and U.S. regulators because their high emissions standards imperiled VW’s massive bet on diesel engines and the big marketing push behind them.

“We want to make this right in the American way,” Michael Horn, CEO of Volkswagen Group of America Inc., said on the floor of the auto show. “We will do everything right to gain your trust. There is more to Volkswagen in the U.S. than the diesel issue.”

Tell that to the 265,000 customers offered “goodwill packages” including a $500 prepaid Visa card and a $500 card to cover expenses at dealers. Tell that to the Justice Department, which is suing VW for billions in connection with the diesel scandal and lamenting the automaker’s reticence to produce emails and other information allegedly protected by German privacy laws.

It’s ‘the German way’

The likes of GM or Ford Motor Co., faced with similar circumstances, wouldn’t dare nowadays to try such obstruction. The political heat and public opprobrium in a 24-7 wired news cycle, powered as much by individuals as news outlets, would not be worth the risk to their brands or corporate credibility.

It’s “the German way,” said Jay Baron, CEO of the Ann Arbor-based Center for Automotive Research. “They’re a little bit quiet, clearly internal. The problem emanates from Germany, not locally.”

Still, the locals have to deal with it: “Quite clearly the first thing we need to do is fix the cars,” said Scott Keogh, president of Audi of America Inc. “The second thing we need to do is create trust. I have no doubt we will come through this stronger than we went it.”

Some 56,000 diesel-powered Audis sold to U.S. customers since 2009, a fraction of the more than 2 million units delivered over the past six years, are affected by the emissions scandal.

Creating trust isn’t as easy as saying so. Müller, the CEO, is scheduled to meet this week with federal regulators to continue talks in hopes of lightening damaging penalties and fines that would harden VW’s reputation as a cheater.

Among the first questions: How will VW change to ensure this kind of deception won’t happen again? Buying its way out of a jam with “goodwill packages” and saying “trust us” are not evidence anything much has yet changed inside Germany’s most consequential automaker.

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Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.