As Calgary's Rob Peers explains, in the wake of Volkswagen's recent emissions debacle, some restructuring may be in order.

1. Rob Peers, Calgary, seesneeded restructuring in wake of Volkswagen PRcrisis
Newsoutlets were abuzzTuesday morningwithnews thatVolkswagen hadstopped salesof diesel cars
inCanada and the US afterallegations they hadfalsified emissionstestresultsontheirvehicles. The En-
vironmental Protection Agency (EPA) allegesVolkswagen andAudi vehicles were equippedwithasensor
that falsifiedemissions resultswhenthe carsare tested. Because Canadianregulators rely oninfor-
mationfromthe EPA when they approve vehicles, vehiclesonbothside of the borderwere flaggedand
banned. InCanada, the affected vehicles are the Golf, JettaandBeetle carsfrom2009-2015 and Passats
from2012-2013.
Thiscomesas a blow forthe international carmaker, whohasbecome a popularandreliable brand. The
company’sdiesel engines have beenabigsellingfactorforVolkswagen Canada, whichreported salesof
13 percentinthe firsteightmonthsof thisyear froma year earlier. However, earlierthissummerthe
company voluntarily recalledoverhalf amillion carsinCanadaand the US overconcerns aboutfaulty air
bags.
Volkswagen’scommitmenttoa greeninitiative made headlines earlierthisyearwhenthey released
theirannual report, one inwhichthe Germanautomakerannounced effortstobe a more ecologically
friendly company. One sectionof the reportentitled, “Onthe way tobecomingthe ecological leader”,
described how the company wasgoingto reduce greenhouse gasemissions fromtheirvehicle andset
an industry standard. The restof the reportoutlines theirglobaleffortstosell more thantenmillion ve-
hiclesworldwide by2018 and become the global leaderincustomersatisfaction andquality.
Volkswagen’sforward thinkingandtheirfocus onthe environmenthelpedthemoutperformToyotain
the firsthalf of 2015 andrake inprofits.Before Tuesday’sannouncement, the automobilemanufacturer
was poisedtomake recordbreakingprofitsfor2015.
Thisis promptingmany toask, can Volkswagen recover?
Rob Peers,Presidentof C2Business Services inCalgary, Alberta, believesthe automakercanindeed
make a comeback from thissetback. “Withsome strategicplanning, Volkswagencanregainthe ground
they lostthisweek, thoughthatmayrequire some restructuring,”Calgary’sRobPeerssaid.
Peerspointed outasexample the restructuringthatSiemensunderwentinthe early 2010s. “Thishelped
renew investorfaith[inSiemens]andhelped the company bounce backandreaprecordprofits.”

2. It may be monthsbefore the true costof the voluntary andmandatory recallsare known to Volkswagen,
but itis imperativethatleadership atVolkswagen startregainingthe trustof theirshareholders andthe
public.
“It isa time forsome deepseeded internalreflecting,”RobPeers commented. “They will wanttoget
back to the drawingboardand get down to theircore values andmandates.”
Restructuringandregainingbrandrespectshould be the mainpriorities the automobile makerfocuses
on in the wake of the allegations.
“They are enteringmajordamage control mode,”saidCalgary’s RobPeers. “They released animmediate
statementandhave calledanemergency boardmeetingforTuesday nightwhere they will likely call for
the resignation of the company CEO.”
Volkswagen’seffortstoaddress the EPA concerns andtheirinternal issues will be underclose scrutiny
overcomingmonths.