What VW is getting right in the emissions-cheating scandal
In just a few days, US accusations that the company was using software to cheat emissions tests have grown to be a global problem.
The diesel engines involved in the scandal are in 11 million cars and trucks, the German company said Tuesday.
But here's one piece of good news - Volkswagen is managing the crisis in the best possible way, and that could mean it comes out of it faster than other automakers have when they've run into trouble.
No denials
At this point, VW is denying nothing, and admitting everything in a furious hurry. Nor is there any finessing of the bad news.
"This is a huge trust issue, and trust issues are the hardest to overcome," said Daniel G. Hill, president of Ervin-Hill Strategy, a crisis-management firm in Washington, D.C.
A crisis like this will create serious doubts in its customers' minds about the company's integrity, Hill explained.
"This tends to lead to the question of, 'If you were dishonest here, how else are you being dishonest?'" he said.
So ultimately it makes no sense for VW to dodge the truth. The company can only compound its problems at this point by trying to share blame or avoid compete transparency.
In the US in particular, where VW has struggled for years to establish itself at the top of the market (it currently holds a meager 2% market share), brand equity is clearly more valuable than vehicle sales.
The few customers that VW has here are loyal, but their understandable impression now is that they were sold a pack of lies by the German car maker.
Falling on swords
Erroneous reports in the German media circulated on Tuesday that VW's CEO, Martin Winterkorn, was out. He later contradicted those reports and said that he's still at the helm - and that he'll work to resolve the issues related to the emissions scandal.
Winterkorn recently survived an executive-suite shakeup at VW and he faces another evaluation by the company's board at a pro forma meeting this week.