Just last month, the world learned that Volkswagen used defeat devices to reduce the effectiveness of the emissions control systems in vehicles equipped with its 2.0-liter turbo-diesel engines. Besides causing a world of pain for VW, the discovery also threatened to tarnish the reputation of diesel engines in the entire automotive industry and around the world. Today, the German automaker is still reeling from the discovery as it pays fines, handles lawsuits, and attempts to repair its image in the eyes of the public. This week, the GM rival announced that it has retained attorney Kenneth R. Feinberg to handle claims related to the debacle. The announcement is noteworthy to GM enthusiasts given that Feinberg presided over General Motors Ignition Switch Compensation Fund for victims of faulty ignition switches in GM vehicles.
Feinberg and his team will “design and administer and independent claims resolutions program to address claims related to the 2.0L and 3.0L TDI vehicles affected by the emissions compliance issue.” In a statement Volkswagen states that it “believes Mr. Feinberg will develop an independent, fair and swift process for resolving these claims.”
Mr. Feinberg is a managing partner of The Law Offices of Kenneth R. Feinberg, PC and is a respected attorney with extensive experience managing high-profile issues as well as many of the nation’s most challenging legal matters. He was appointed to two presidential commissions by Presidents Reagan and Clinton and administered several other significant programs.
In the GM ignition switch fund, Feinberg’s staff approved compensation for 124 fatalities and as well as 275 injuries, paying out a total of $599 million to victims or their families.
Comments
VW will be a far weaker company once this is resolved. They will need to delay the Modular tooling of Latin American factories, reduce the core VW brand into something smaller and resembling Ford and Opel, and may need to sell Seat or the truck division.
I’m excited for when VW later needs to do a 3million car recall on one of it’s modular architectures which is bound to happen.
Note to GM: Move slowly with kits. Maybe even forfeit some profit, short term, and simply cut down to ten platforms instead of four. That appears to be the Ford plan and GM is in a far better position with global Delta and Epsilon.
I agree VW will feel the pain there but they are far from what I would call Weak.
They have many options to deal with here to handle the cost involved. As of now they do not have to cut much other than fringe products like the phaeton to deal with this right now.
If things get worse they just unload Lambo or Bentley and move on.
The greatest loss they will suffer is the loss of profits from their very profitable Diesel lines.
VW needs to reorganize and become more efficient anyway.
If love to see them slow down on product refreshes and reduce incentives which would aid Opel’s turnaround.
Opel needs to take advantage of this situation and long-term position themselves between VW and Skoda.
Well what VW has been doing got them to the top so I would have to say they are not all that inefficient.
As for Opel. Well Opel needs to worry about Opel as the VW thing is not going to change their path. They just need to focus on the new product and market it well.
In the markets Opel and VW share little will change because of VW’s past sins. It is up to Opel and their new products to make the difference.
VW’s organization is actually one of its major strengths. Every major division (brand) is run separately, without central planning but with some central oversight. GM can and should adopt this model, as they had it back before the 70s… before the bean counters got a grasp of the company. In fact, one could say that VW is running GM’s old org structure better than GM ever did.
As for VW becoming more efficient… it is the most efficient automaker in terms of R&D, production, redource utilization, and even sales operations. It’s right there with Toyota when it comes to efficiency. Efficiency is not an issue for it. What is an issue is weak US performance, which is currently being worked on, and should improve.