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Introduction to VW and GM case
Today’s Agenda
• Large automotive companies and ethics.
• Applying ethical principles to VW and GM.
• VW Case study
• GM Case study
• Setting up Assignment 2
2
https://flic.kr/p/8XLzCQ
Auto industry in trouble
3
Applied Ethics Model
Following the above model will allow us to decide:
1. What to do
2. Why you should do it (or not)
4
Governing
or Ethical
Principles
Relevant
facts
Practical
Conclusions
VW in the news
• Volkswagen to recall 11 million vehicles as emissions scandal expands
• Volkswagen facing 'tsunami' of legal trouble in emissions scandal
• Volkswagen, Audi class action requests continue in Quebec
• Volkswagen announced plans on Tuesday to refit up to 11 million vehicles and
overhaul its namesake brand following the scandal over its rigging of emissions
tests.
• New CEO Matthias Mueller said the German carmaker would tell customers in
the coming days they would need to have diesel vehicles with illegal software
refitted, a move which some analysts have estimated could cost more than $8.7
billion.
• VW share price dropped more than 40% over the past two weeks
5
VW extend recall due to emission scandal
6
The VW Emissions Scandal
• http://sacramento.cbslocal.com/2015/09/22/university-that-found-
volkswagen-emissions-problems-discovered-similar-issue-previously/
• http://www.bloomberg.com/news/articles/2015-09-22/putting-a-price-on-
volkswagen-s-diesel-emission-fraud-liability
• http://www.huffingtonpost.ca/2015/09/22/vw-11-million-diesel-vehicles-
fitted-with-suspect-software-setting-aside-7-3-billion_n_8175598.html
• http://www.reuters.com/article/2015/09/23/us-usa-volkswagen-
idUSKCN0RL0II20150923
• http://www.cbc.ca/news/technology/how-emissions-tests-that-exposed-
vw-scandal-were-done-1.3243461
7
• What did VW engineers do?
• Why is this an ethical issue?
• What were the pressures that caused them to behave in this way?
• How did this break their contract with customers/dealers?
• Do you think the CEO knew about it?
• What will be the likely consequences for the company?
8
VW - Questions to consider in class
• It took General Motors more than 10 years to issue a recall for 2.6 million cars
carrying an ignition switch now blamed for at least 124 deaths and 275 injuries.
• The firm admitted in September that it failed to disclose its small-car ignition
switch could turn the car off while being driven, lock the steering wheel and also
fail to set off airbags in a crash. There are internal reports about the problem
dating back to 2002 in the Saturn Ion, Reuters reported.
• The deception cost the company more than $1 billion US — and 15 people their
jobs.
• The firm reached a $900-million settlement with the U.S. government to avoid
criminal charges. That figure is on top of $625 million that GM set aside as
compensation for those injured or killed by the flawed ignition switch. Families of
those who died will get at least $1 million.
9
GM in the news
GM – the switch from hell
10
THE CASE OF THE GM IGNITION SWITCH
• http://www.wxyz.com/news/local-news/investigations/gm-
employees-knew-of-faulty-ignition-switches-10-years-before-issuing-
recall
• http://www.cbc.ca/fifth/episodes/2014-2015/gm-recall-the-switch-
from-hell
11
• What caused the original problem at GM?
• When did they become aware of it?
• Why did they ignore the initial information?
• What were the pressures that caused them to behave in this way?
• How did this break their contract with customers/dealers?
• Is there an ethical difference between the decisions of GM and VW?
12
GM - Questions to consider in class

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Cases for class discussion

  • 1. Introduction to VW and GM case
  • 2. Today’s Agenda • Large automotive companies and ethics. • Applying ethical principles to VW and GM. • VW Case study • GM Case study • Setting up Assignment 2 2 https://flic.kr/p/8XLzCQ
  • 3. Auto industry in trouble 3
  • 4. Applied Ethics Model Following the above model will allow us to decide: 1. What to do 2. Why you should do it (or not) 4 Governing or Ethical Principles Relevant facts Practical Conclusions
  • 5. VW in the news • Volkswagen to recall 11 million vehicles as emissions scandal expands • Volkswagen facing 'tsunami' of legal trouble in emissions scandal • Volkswagen, Audi class action requests continue in Quebec • Volkswagen announced plans on Tuesday to refit up to 11 million vehicles and overhaul its namesake brand following the scandal over its rigging of emissions tests. • New CEO Matthias Mueller said the German carmaker would tell customers in the coming days they would need to have diesel vehicles with illegal software refitted, a move which some analysts have estimated could cost more than $8.7 billion. • VW share price dropped more than 40% over the past two weeks 5
  • 6. VW extend recall due to emission scandal 6
  • 7. The VW Emissions Scandal • http://sacramento.cbslocal.com/2015/09/22/university-that-found- volkswagen-emissions-problems-discovered-similar-issue-previously/ • http://www.bloomberg.com/news/articles/2015-09-22/putting-a-price-on- volkswagen-s-diesel-emission-fraud-liability • http://www.huffingtonpost.ca/2015/09/22/vw-11-million-diesel-vehicles- fitted-with-suspect-software-setting-aside-7-3-billion_n_8175598.html • http://www.reuters.com/article/2015/09/23/us-usa-volkswagen- idUSKCN0RL0II20150923 • http://www.cbc.ca/news/technology/how-emissions-tests-that-exposed- vw-scandal-were-done-1.3243461 7
  • 8. • What did VW engineers do? • Why is this an ethical issue? • What were the pressures that caused them to behave in this way? • How did this break their contract with customers/dealers? • Do you think the CEO knew about it? • What will be the likely consequences for the company? 8 VW - Questions to consider in class
  • 9. • It took General Motors more than 10 years to issue a recall for 2.6 million cars carrying an ignition switch now blamed for at least 124 deaths and 275 injuries. • The firm admitted in September that it failed to disclose its small-car ignition switch could turn the car off while being driven, lock the steering wheel and also fail to set off airbags in a crash. There are internal reports about the problem dating back to 2002 in the Saturn Ion, Reuters reported. • The deception cost the company more than $1 billion US — and 15 people their jobs. • The firm reached a $900-million settlement with the U.S. government to avoid criminal charges. That figure is on top of $625 million that GM set aside as compensation for those injured or killed by the flawed ignition switch. Families of those who died will get at least $1 million. 9 GM in the news
  • 10. GM – the switch from hell 10
  • 11. THE CASE OF THE GM IGNITION SWITCH • http://www.wxyz.com/news/local-news/investigations/gm- employees-knew-of-faulty-ignition-switches-10-years-before-issuing- recall • http://www.cbc.ca/fifth/episodes/2014-2015/gm-recall-the-switch- from-hell 11
  • 12. • What caused the original problem at GM? • When did they become aware of it? • Why did they ignore the initial information? • What were the pressures that caused them to behave in this way? • How did this break their contract with customers/dealers? • Is there an ethical difference between the decisions of GM and VW? 12 GM - Questions to consider in class