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The Volkswagen Debacle: A Triumph for Nonprofits and the Public Sector

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Kenyatta Lovett
October 13, 2015

A few weeks ago, Volkswagen’s chief executive Martin Winterkorn resigned from his post due to a recent scandal. The problem began when U.S. regulators discovered a software manipulation, crafted by the auto manufacturer, to disguise unlawful emissions. Hundreds of thousands of diesel cars produced in this nation have been impacted by this gross violation. The company is now uncertain about the future of Volkswagen. With all the bad news surrounding this story, there are some hidden triumphs to be highlighted. These triumphs speak to the power of good government and the enormous contributions our nonprofit organizations make to this nation every day.

To understand the story, you have to begin with policy, new standards on fuel economy to be more specific. We live in a world where regulation is often considered a bad thing, stifling the progress of the marketplace. In spite of the damaging effects of exhaust emissions on the environment, companies would lean toward saving money and maximizing profits if they were not held accountable. The Volkswagen story captures the essence of this reality. The New York Times outlines the series of decisions made by the auto giant in their choice between compliance and a strategy of worldwide growth. However, the unraveling did not truly begin with regulators ensuring gas standards were in place for Volkswagen. The downward slope began with a well-intended study by a nonprofit organization.

auto-736794_640The International Council on Clean Transportation in 2013 embarked on a study to test on-road diesel emissions. The intent was to compel automakers in other countries to make improvements to their emissions standards. Their on-road testing method was different from the standard treadmill testing approach. The results produced the data that initiated a long series of conversations between Volkswagen, the nonprofit organization and government authorities.

The smoking gun was not found in a secret device, but inside lines of software code. In a simple explanation, the code would adjust the engine’s performance during normal testing. This unfortunate circumstance for Volkswagen turns out to be a series of fortunate events for the public and nonprofit sectors. This story shows why we should never throw the baby out with the bathwater when we contemplate the idea of reducing the size of government or the provisions granted to nonprofits.

Nonprofits: Go Where No Man Has Gone Before

We often associate innovation with the entrepreneurial spirit found in the private sector. However, the efforts of the International Council on Clean Transportation symbolize the innovation nonprofits deliver to our world every day. Without the creativity of the nonprofit sector, issues and problems in our world that lack the evidence of financial gain would never be solved or have the potential to be solved. In the case of Volkswagen, the creativity solved a problem unknown to most of us before now that emissions control can be complicated in the face of complex machinery and technology.

Public Specialization: Modernizing the World Means Modernizing Government

Most people can understand how code could possibly manipulate the performance of a car. However, most would not know where to begin detecting this problem if we had the software code printed on a billboard. Aside from expensive devices to scan the environment for harmful elements in the air, it appears that environmental regulators must also have the technology available to understand how computers and software have an impact on emissions, given most things are now controlled by some form of software. To specialize environmental regulations through new forms of technical expertise, even computer science, requires a considerable amount of investment in tools and human capital. Yet, the discovery of this recent violation through software analysis offers some justification for the growing cost of government to do its job. Modernizing government is indeed the cost of doing business.

The Childhood Question: Where Do Traffic Lights Come From?

We see the anomalies everywhere and they stem from a previous assumption regarding self-correction. Whether it is the alarming rise of murders by gun violence or oil spills in the Gulf, it is not unreasonable or un-American to desire some form of accountability in many of the things we do, as people or as organizations. The Volkswagen story starts with government pressure, through policy, to test the limits of fuel economy. Without forward thinking approaches to accountability, it is scary to think about the alternative reactive approach that would leave this nation with fewer options.

California is currently contemplating reforms for carbon. However, in spite of the need to remedy many things gone wrong with California’s environment, there is little political or public support available at this time. The journey beyond will be uncertain if we inform policy through head-on collisions. The traffic lights come from us, to protect us and to help us, even when we are not aware we need it.

Author: Kenyatta Lovett, Ph.D. serves as an adjunct professor at Tennessee State University in the College of Public Service and Urban Affairs. He teaches courses in public finance and organizational leadership.

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One Response to The Volkswagen Debacle: A Triumph for Nonprofits and the Public Sector

  1. Kyujin Jung Reply

    October 14, 2015 at 4:21 pm

    Thank you Dr. Lovett for sharing a great article.

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