Volkswagen to accept responsibility for conduct in Brazil
The Volkswagen Group has accepted responsibility for its conduct during the military dictatorship in Brazil. This has been emphasized by Karlheinz Blessing, member of the Board of Management with responsibility for Human Resources. An external expert appointed by the Board has found that there was cooperation between Plant Security at Volkswagen do Brasil and the political police of the former military regime. “We will make the report findings public soon. At that point, we will also explain what kind of reparation we are considering,” says Blessing. He said he personally was prepared to travel to Brazil to apologize on behalf of Volkswagen. In an interview with Internal Communications, Blessing also stresses that the company is in a good position, despite the recent negative headlines: “Don't be put off! Volkswagen Group is in much better shape than it seems at first glance.“ One proof of this is our good operating profit in the first half of the year. “Credit for this excellent performance goes to the entire workforce.” As regards the discussions about the diesel issue, Blessing stressed that this kind of engine would be needed for at least two more decades.
“We will need diesel for at least another two decades”
A raft of negative headlines have recently been weighing on the mood of Volkswagen employees. In this interview, Karlheinz Blessing, member of the Board of Management with responsibility for Human Resources in the Volkswagen Group, talks about the current situation, the future of diesel, and lessons learned from past mistakes.
Diesel crisis, antitrust allegations and critical reports on the period of military dictatorship in Brazil are dominating media reports. What do you say to an employee who wants to know: given all these allegations, why should I still enjoy going to work?
I understand very well how all these negative reports are weighing on the mood of my colleagues. That's why I say to them: Don't be put off! The Volkswagen Group is in much better shape than it seems at first sight. We can’t comment in detail on every issue right now, but I want to emphasize: We are tackling the problems and are making excellent progress with the company’s transformation. This applies to the diesel issue, cultural change as well as the transformation of our core business.
But among the public, there is a perception that Volkswagen is only making very sluggish, if any, progress with the diesel issue...
But that isn't true. The fact is that we have made large strides in dealing with the diesel issue. They include agreements in the USA as well as the successful modifications carried out in Europe. Four out of five vehicles affected have been to the workshop by now. We are continuing these efforts at great speed. We want to complete the modifications by the end of this year, and feedback has shown that customers are satisfied with the modifications. We will also complete the latest recall, affecting the Porsche Cayenne, as soon as possible. At the start of the diesel crisis, we had no indication that this vehicle was also affected. Our focus was on making progress where a particularly large number of vehicles were affected. We have, of course, started to address the Cayenne diesel issue.
The modifications are no doubt important, but action to prevent a recurrence of the diesel crisis is at least as much of a necessity. How are we doing on that?
We have also made excellent progress with that. We have been innovating the organization, processes, mindsets and values at Volkswagen since 2015. Our new whistleblower system encourages employees to report any misconduct as soon as possible. In addition, we have significantly tightened the internal control systems and created clear rules intended to prevent misconduct from the outset, if possible.
Better controls alone are probably not enough. What role does cultural change play?
It’s not enough to just comply with the rules. At Volkswagen, we expect our managers and employees to detect and avoid legal gray areas. Integrity, meaning sincere, honest behavior, is a core element of TOGETHER – Strategy 2025.
We are fundamentally reorganizing Volkswagen. The new corporate structure will strengthen brands and regions. We are scaling back bureaucracy and reducing to a fraction the number of guidelines applicable throughout the Group. We are making Volkswagen more efficient, faster, more focused, more customer-oriented, more entrepreneurial, more international and more female. We are reforming personnel development. To be a manager in the Volkswagen Group means to be a role model. A role model in compliance with regulations and agreements; a role model in driving and implementing change; a role model in accepting and delegating responsibility. All this is reflected in the Code of Cooperation, which defines the way we deal with each other. “Genuine.” “Straightforward.” “Open-minded.” “As equals.” “United.”
When will the changes come to fruition?
Some of them are effective immediately, for example the new whistleblower system or the consistent application of the dual control principle. For others, we will need a transition phase, and some will unfold gradually. People need time to embrace change. The important thing is that we tackle and change things at Volkswagen. I know: many Volkswagen employees are working extremely hard to make the company secure enough to meet future challenges. That is the right thing to do, because we can only shape Volkswagen’s future together: the Board, management, the workforce and employee representatives.
Given the many challenges, how do you make sure we keep our eyes on the operating business?
The first half of 2017 has shown that we are by no means losing sight of the operating business: Our operating profit has increased to 8.9 billion euros, and the operating return on sales was 7.7 percent. Credit for this excellent performance goes to the entire workforce. Deliveries are doing well, customer confidence is on the increase, the Volkswagen Group is on the right path, despite the difficult circumstances. And that is indeed important and necessary, because a solid operating business is the foundation on which we will develop the Group from a car maker into one of the world’s leading providers of sustainable mobility.
What role will diesel play in future?
The image of diesel has unfortunately been tarnished. Even so, it will remain essential for many years to come to ensure climate protection targets are met. We should therefore keep the debate on a factual level. Our modern EU6 engines are top performers in terms of nitrogen oxide and dust particles. At the same time, diesel cars have clear advantages over their gasoline equivalents when it comes to CO2. In addition to these ecological aspects, there are social considerations. Many jobs depend on diesel – in Germany as well as in other countries. We want change, but we want it to be socially compatible. To achieve that, we will need diesel for at least another two decades.
The energy revolution has been declared a political goal, in Germany at any rate. Away from fossil fuels toward renewable energy. How can diesel still play a role in this scenario?
There is no point in shifting the emissions from car exhausts to the smokestacks of power stations. The expansion of electromobility must therefore go hand-in-hand with a change in energy generation: away from lignite, coal, and even natural gas. That’s a huge task, which has to be addressed jointly by politicians and industry. Volkswagen has the right products to achieve that: modern electric cars with an attractive range and attractively priced. Examples include the new I.D. family models and many other products developed by our Group brands.
Volkswagen’s role during the military dictatorship in Brazil has been in the spotlight recently.
My position on this is clear: An injustice remains an injustice, no matter how long ago it was committed. For this reason, Volkswagen will face up to its responsibility. The Board of Management appointed the well-known historian Prof. Christopher Kopper to compile an expert report on Volkswagen’s relationship with Brazil’s military dictatorship at the time. The study was released to us a few days ago. It has found that there was cooperation between Plant Security at Volkswagen do Brasil and the political police of the former military regime. We will make the report findings public soon. At that point, we will also explain what kind of reparation we are considering.
What form could reparation take?
We are looking into that right now. Whatever the case, there must be reparation on a personal level. We must apologize. I am prepared to travel to Brazil to do that. One thing is certain: we accept responsibility. Because our corporate culture doesn’t just exist on paper. We live it.