German car giants Daimler and Volkswagen have turned to consulting firms Deloitte and McKinsey & Company in a bid to better react to the turmoil caused by their CO2 emissions. Deloitte has been hired to investigate Daimler’s certification process for diesel exhaust emissions, while McKinsey is set to draft a strategy to move Volkswagen beyond the scandal.
Volkswagen, the second-largest automaker in the world, has recently fallen into disrepute after it admitted it installed diesel emission cheat systems into a large number of its vehicles sold on the US and other markets. Early in April, owners of US Mercedes diesel cars, produced by German carmaker Daimler, filed a class action lawsuit, alleging that the company too has acted fraudulently by installing software that rigs the emissions testing process.
The market capitalisation of both companies suffered considerably since the breaking of the news – on April 25 of this year, Volkswagen’s share price was 15% lower to when the news was unveiled, while Daimler has since seen 13% of its market capitalisation evaporate. Both companies are now well into damage control mode, Volkswagen is running a number of internal probes as well as PR campaigns, while Daimler is in investigation mode, to identify if there is a case to be answered for.
To support them with their respective tasks, Volkswagen and Daimler have called in independent third parties for advice, in the case of Volkswagen for damage control, and in the case of Daimler to go through the books.
Volkswagen has turned to global strategy consulting consultancy McKinsey & Company. The consulting firm will be responsible for supporting Chief Executive Officer Matthias Mueller move the company beyond the current crisis. Mueller is currently drafting a number of strategic goals through 2025, while will be presented this summer. Consultants from McKinsey are guiding the strategy development process, and are assisting with analyses and assessments.
Daimler has called in the professional services of Deloitte, to go through its suspected operations with a fine tooth comb. The internal investigation, on behest of the US Justice Department, will investigate the certification process for diesel exhaust emissions. The consulting and audit firm is, according to German weekly Der Spiegel, combing through documents and emails from staff in the company’s Sindelfingen, Germany, engine development site and its corporate headquarters in Stuttgart.
As the investigations continue, serious questions about the damage that the car manufacturers have done to public health continue to circulate, with one report citing €29 billion in damages from Volkswagen alone.