Christopher Calderon

CST 373
02/22/2018

Volkswagen Emissions Scandal

My name is Christopher Calderon. I am enrolled in CST 373 which is a part of

CSUMB's Computer Science Online Degree program. The field of computer science is

of great interest to me as it offers many different outlets to pursue what I am passionate

about. After completing this program, I intend to enter the technology sector as a

software developer. The following essay will explore some of the ethical challenges my

cohort and I may face as future software developers. It will focus on a well-documented

case in which a major, international company chose to have its software developers

design software to undermine government regulations. The actions of the company and

its software development team will be analyzed from an ethical standpoint. The

consequences of their decisions will also be highlighted in order to demonstrate why

these sort of behavior is not permissible.

Technology and business are strongly intertwined. In order to excel in business

in today's highly competitive climate, it is necessary for companies to seek out members

of the technology sector who are well-versed in current and future trends in their

respective fields. Perhaps more importantly, it is critical that a company maintain its

integrity in all aspects of its business. Once a company's integrity is questioned, it's

reputation can diminish overnight. In September of 2015, this precisely what happened

to Volkswagen in what is now commonly referred to as the Volkswagen Emissions

Scandal.

History
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The Clean Air Act (CAA) was passed in the United States in 1963 in an effort to

control air pollution levels. Prior to this, there had not been any federal regulation in

place to curb air pollution. There had only been studies conducted by Congress to

examine air pollution. A couple of years later in 1965, the CAA was amended by the

Motor Vehicle Air Pollution Control Act which sought to establish guidelines for the

levels of pollutants emitted by motor vehicles. By 1970, the Environmental Protection

Agency (EPA) was established in conjunction with further amendments. Leading up to

the events of Volkswagen Emissions Scandal, the EPA was instrumental in shaping the

CAA that was eventually violated by Volkswagen.

Although the CAA was initiated to reduce air pollution, not everyone in the U.S. is

convinced of the EPA's effectiveness to do so. According to a government report, about

59 percent of lawsuits from 1995 to 2010 were filed against the CAA (GAO, 2015).

Under the U.S.' current administration, the EPA is also being targeted. President Donald

Trump is looking to cut the budget of the EPA by about 23 percent. The reason for the

cuts according to EPA's is to eliminate programs that "create unnecessary

redundancies or those that have served their purpose and accomplished their mission"

(EPA, 2018). On a global scale, the U.S. is currently at odds with controlling emissions

worldwide by not signing the Paris Agreement, which seeks to reduce emissions for the

whole planet. In essence, the U.S. seems to not have its focus on combating air

pollution any longer.

Regardless of the current U.S. administration's position on fighting air pollution,

at the time of Volkswagen Emission Scandal, the EPA was the government agency
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responsible for issuing the violation against CAA. The EPA accused Volkswagen of

installing defeat devices in its diesel vehicles which ran on software that altered the

emissions performance of the vehicles while they were being tested. The software was

able to accomplish this by analyzing a vehicle's speed, engine operation, air pressure,

and steering wheel position. Once the software verified it was in a test setting, it would

cause the vehicles to output permissible levels of emissions. On the road, however, the

vehicles were actually emitting nitrogen oxide which was about 40 times above the legal

limit in the U.S. The vehicles affected included the Audi A3 and the Volkswagen models

Beetle, Golf, Jetta, and Passat. Altogether, it is estimated that 11 million vehicles were

affected worldwide.

Media Views

From September 18, 2015, to the weeks that followed, the Volkswagen

Emissions Scandal was relentlessly being covered by the media. Many of the headlines

that could be found at the time included the words "cheated," "scandal," "shameful,"

"criminal," and "fraud." The scandal even took on nicknames such as "Dieselgate" and

"Emmisionsgate," which gave the severity of the event an immediate correlation to the

notorious Watergate Scandal. It does not seem that any news outlet at the time was

giving Volkswagen the benefit of the doubt. Although there had not been a court ruling,

the media definitely appeared to be on the side of the EPA.

It would take a little longer than a year for Volkswagen and it's executives to be

officially charged by the Justice Department. The company pleaded guilty on January

11th, 2017 and was fined $4.3 billion. By this point in time, media coverage of the
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scandal appeared to be slightly less biased and more matter-of-a-fact. Leading up to

ruling, there were many editorials that summarized the events of the scandal from

various news outlets. The media seemed to be more focused on reporting the facts of

the scandal instead of making bombastic announcements.

Recently, there has been coverage on Volkswagen noting that the company was,

and is, currently rebounding. It does not appear that the scandal will have long-term

effects. Consumers are increasingly returning to Volkswagen despite the heavy media

coverage of the scandal. Most likely, this can be attributed to the coverage of

Volkswagen’s reaction to the scandal. The company chose to do everything in its power

to regain the trust of its consumers. Detailed articles were written about Volkswagen’s

plans to buyback or fix affected vehicles at no cost to the consumer. The media seemed

to realize that many people were concerned about the whole matter and they were

awaiting any updates, negative or positive. Essentially, the strong media interest in the

scandal could have very well helped Volkswagen bounce back.

Other Views

In general, anyone who inhaled air in a major metropolitan area where

Volkswagen vehicles were sold was affected by this scandal. As I mentioned previously,

the affected vehicles output about 40 times the emissions legally allowed in the U.S.

This is a substantial figure. However, it is difficult to pinpoint exact figures that are able

to describe how the overall air quality was affected by the scandal. Nonetheless, it is

safe to assume that the air quality was far less than optimal due to the 11 million

vehicles on the road.

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More specifically, the owners of the affected vehicles themselves were perhaps

the most concerned over the scandal. The vehicles were marketed and sold based on

their perceived friendliness to the environment. Once it came to light that those vehicle

attributes were in fact lies, anger and frustration amongst the owners became

widespread. In an article published on Harvard Business Review's website titled "What

100,000 Tweets About the Volkswagen Scandal Tell Us About Angry Customers," the

immediate consumer backlash and reaction is described to be highly negative and

fueled by uncertainty (Swaminathan, 2016).

Owners of the various Volkswagen and Audi vehicles affected came from various

ethnic and socioeconomic backgrounds. The vehicles appealed to young college

students, middle-aged men and women from low to high income brackets, and

environmentally conscious individuals. Although the EPA allowed the vehicles to still be

driven, many of the owners developed mixed feelings about their high polluting vehicles.

For the individuals that were more financially stable at the time, they may have endured

the scandal slightly better than those who were not in the same position. People with

more money were more likely to have another vehicle or the ability to purchase a new

one.

For those who were less financially privileged, the scandal brought about

concern and anxiety over their vehicle's market worth and any associated costs for

repairs. Volkswagen would eventually pledge to do the right thing by buying back or

fixing its consumer's vehicles, but it would take nearly a year for this to happen.

Consequently, owners looking to sell their vehicles in between that time period had a
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difficult time due to the fact that their vehicle's value was significantly reduced. Many of

these individuals were forced to keep driving the vehicles they bought under false

pretenses. For people who purchased their vehicles based on the environmentally

friendly selling point, this was especially troublesome.

Ethical Perspective

Prior to the scandal, Volkswagen and its leaders made a series of calculated

decisions that most people would argue were highly unethical. For the individuals that

made those decisions, it can be assumed that they were operating under a set of ethical

frameworks in order to justify their actions. Volkswagen's behavior is most closely

related to the egoism ethical framework. Under this framework, businesses are said to

base all operations and decision making around maximizing profits. Volkswagen is a

publicly traded company and its sole purpose is to appease their shareholders.

Ordinarily, following this ethical perspective can provide a justification for one's actions.

The fault of Volkswagen, however, is that it did not also act free of deception or fraud.

The deceiving nature of Volkswagen's scandal was undermined by a

utilitarianism ethical framework. This framework is centered around the idea that ethical

decisions are developed by assessing which actions will have the most positive effect

on the most people. Consequently, decisions following this ethical framework tend to

leave some individuals unaffected. Most notably, those who are in the minority. In the

example of Volkswagen, the majority can be viewed as the shareholders, consumers

who desire fuel-efficient and environmentally friendly vehicles, and the company itself.
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By making the decision to install the defeat devices, Volkswagen believed they were

making a decision that would satisfy this majority.

Eventually, Volkswagen was able to actually base its actions in an ethical

framework and follow through completely. When Volkswagen made the decision to

apologize, buyback or fix affected vehicles, and also provide some compensation to

consumers, it could be said that it was acting ethically. The ethical framework for these

actions is the deontological perspective. Under this framework, individuals consider

whether an action is something that is the right thing to do regardless of how many

other individuals might do it. The only thing that matters is the righteousness of the

action.

Future Challenges

The immediate reaction to the Volkswagen Emissions Scandal was a sharp

decline in the value of stock in the company as well as a decrease in sales. After about

a week of the public announcement of the violation, Volkswagen's stock plummeted to

about 50%. Over the next year, the stock price remained at very low levels. Eventually,

however, the stock price began to crawl back up. The upward trend can most likely be

attributed to Volkswagen's follow through with its promise to consumers to make the

situation right. However, Volkswagen still has a long way to go increase its stock and

sales to levels before the scandal.

Another problem Volkswagen may face is that some consumers may believe the

company has more nefarious activities to hide. It is reasonable for some to see the

events of the scandal as insight into the type of company Volkswagen might actually be,
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potentially still deceiving and fraudulent. In some online forums, some members of the

online community proclaimed that the Volkswagen is still filled with people who are

committing unlawful activities. Even without proof, rumors such as these can only serve

to harm the company's reputation even further.

For Volkswagen, its problem is most likely fixable. The leading executives have

been swapped out and the company is under more trustworthy supervision. For other

companies that went through scandals, such as Chipotle in the same year, attracting

consumers once again is not always on the table. In Chipotle's case, people became

extremely ill. In food-safety related cases, it is much more difficult to win back a

following. Fortunately, Volkswagen's scandal did not involve any illness or death. Boiled

down to its essence, it was a small number of bad people who are no longer with the

company, who made poor decisions that had no physical effect on consumers.

Another key aspect that Volkswagen has going for itself is that it still has

consumers who are brand loyal. It is entirely reasonable that some consumers had

Volkswagen vehicles that were not affected by the scandal in which they have no

negative experiences with. This combined with Volkswagen's actions after the scandal

could cause many consumers to view the whole ordeal as a misstep in the company's

endeavors. Just as individuals do, companies can make mistakes. It is very likely that

10 years from the date of the scandal, many consumers will have had enough distance

from the events to view Volkswagen in a more favorable light. Additionally, other

companies are likely to experience setbacks in the near and distant future. We appear
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to exist in a climate where it is becoming difficult for individuals and businesses to

undermine the law.

My Reflections

As someone who has had a lot of admiration for various Volkswagen vehicle

models, I was incredibly surprised to learn about the scandal. Many of my positive

feelings about the company and its vehicles were derived from friends and family

members who owned Volkswagen and Audi cars. At one point in time, I was even

considering purchasing a Volkswagen. Just as many of my friends and family members

felt deceived by the company in the immediate aftermath, I too felt as if I was deceived.

As a future software developer, I also felt somewhat let down.

The whole scandal rested on the Volkswagen's ability to manipulate software.

This implies that software engineers, who most likely went through years of schooling,

chose to become accessories to a crime. The end result could not have been

accomplished without a full understanding of what was being requested of them. I find

this fact to be rather unsettling. It also left me with a few questions that I was unable to

answer: Did the software engineers actually approve of what they were being asked to

do? Were they forced to do it? Were they paid to do it? Would they lose their job if they

refused? I can only assume I would do the right thing in that unfortunate situation, but it

did cause me to realize I may be asked to do some things as a software engineer that I

disapprove of from an ethical standpoint.

One key aspect of the scandal that stuck with me was Volkswagen's response.

From my perspective, Volkswagen did not undercut the consumers in the end. The
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company appeared to do everything in its power in order to repent for its actions. I also

realize that many of the people responsible for the scandal are now out of the picture. It

is essentially a different company. In fact, I am willing to argue that the standards in

terms of company transparency and honesty have significantly increased. As a result, I

would probably purchase a vehicle from Volkswagen in the future, or at least consider it

a viable option.

Although my opinion for Volkswagen has improved since the scandal, I still

believe Volkswagen and other companies need to be held accountable for their actions

and their promises to consumers. Companies should not be able to develop, mass

produce, and market a product without verifying that all claimed features are in fact

proven to be true.

A better system of checks and balances is needed. Unfortunately, the EPA is

currently experiencing cuts to its annual budget. In order to hold companies

accountable, I believe the EPA, along with other government organizations, require

more funding to conduct investigative work. The Volkswagen scandal was made

possible through software engineering, which was most likely an area the EPA or

federal government never thought to investigate. With more funding comes more

opportunities to fully look into matters that may slip past consumers and federal

agencies. Defunding agencies such as the EPA can become a slippery slope. For the

corrupt companies out there that are well aware that the EPA will soon have fewer

enforcement capabilities than before, it could mean that more consumers will become

victims of another scandal.

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References

Government Accountability Office. (2015, August, 4). Environmental Litigation:

Information on Cases against EPA and FWS and on Deadline Suits on EPA

Rulemaking

https://www.gao.gov/products/GAO-15-803T

Environmental Protection Agency. (2018, February, 2). EPA FY 2019 Budget Proposal

Released. https://www.epa.gov/newsreleases/epa-fy-2019-budget-proposal-released

Swaminathan, V. (2016, September, 2). What 100,000 Tweets About the Volkswagen

Scandal Tell Us About Angry Customers.

https://hbr.org/2016/09/what-100000-tweets-about-the-volkswagen-scandal-tell-us-abou

t-angry-customers