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BMW Denies Collusion

TempGerman automakers felt another blow this weekend when they were accused of colluding. The news came as Daimler recalls 3 million cars, and Audi recalls 850,000 to lower their emissions.

German officials found documents related to a potential technology cartel when looking for evidence about potential anti-trust issues related to steel. To avoid penalties, VW and Daimler admitted meeting regularly with competitors. Spiegel magazine quoted VW as saying five German carmakers met "several times a year" and had been "co-ordinating the development of their vehicles, costs, suppliers, and markets for many years, at least since the Nineties, to the present day."

One area of discussion was about the size of the technology to hold AdBlue, a chemical cleaning substance. Automakers agreed on a smaller tank to reduce costs and allow more room for accessories, such as audio, but this meant less efficient cleaning of exhaust gases.

In a statement, BMW denied the accusations:

“BMW vehicles are not manipulated and comply with respective legal requirements,” and “The BMW Group categorically rejects accusations that Euro 6 vehicles sold by the company do not provide adequate exhaust gas treatment due to AdBlue tanks that are too small.”

VW may have learned a lesson from the emissions scandal. A New York Times article summarizes how earlier admissions may have helped avoided trouble:

If Volkswagen had been honest with American officials [in May 2014 when Winterkorn received a memo about the inconsistent test results], the damage to the company’s reputation and finances would very likely have been serious but not devastating. Similar cases suggest that Volkswagen would have paid a fine in the hundreds of millions of dollars.

Image source.

Discussion:

  • Assess BMW's strategy. What principles of persuasion is the company using? What crisis communication techniques would be useful to the company at this point?
  • To what, specifically, is VW admitting? What, specifically, is BMW denying?
  • Where's the line between meeting and collusion?