DETROIT -- Volkswagen of America issued false statements this week saying that it would change its brand name to "Voltswagen," to stress its commitment to electric vehicles, only to reverse course Tuesday and admit that the supposed name change was a joke.
Mark Gillies, a company spokesman, confirmed Tuesday that the statement had been a pre-April Fool's Day joke after having insisted Monday that the release was legitimate and the name change accurate. The company's false statement was distributed again Tuesday, saying the brand-name change reflected a shift to more battery-electric vehicles.
Volkswagen's intentionally fake news release, highly unusual for a major public company, coincides with its efforts to repair its image as it tries to recover from a 2015 scandal in which it cheated on government emissions tests and allowed diesel-powered vehicles to illegally pollute the air.
In that scandal, Volkswagen admitted that about 11 million diesel vehicles worldwide were fitted with deceptive software. The software reduced nitrogen oxide emissions when the cars were placed on a test machine but allowed higher emissions and improved engine performance during normal driving. The scandal cost Volkswagen $35 billion in fines and civil settlements and led to the recall of millions of vehicles.
[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=et70Vz_B6AY]
The company's fake news release, leaked on Monday and then repeated in a mass email to reporters Tuesday, resulted in articles about the name change in a number of media outlets, including The Associated Press.
In falsely announcing a name change, the company went beyond telling reporters that its news release was legitimate. On Tuesday, the company emailed to reporters a release that quoted its chief executive officer announcing the fake change:
"We might be changing out our K for a T, but what we aren't changing is this brand's commitment to making best-in-class vehicles for drivers and people everywhere," Scott Keogh, president and CEO of Volkswagen of America, said in the release.
The fake release could land Volkswagen in trouble with U.S. securities regulators because its stock price rose nearly 5% on Tuesday, the day the bogus statement was officially issued. Investors of late have been responding positively to news of companies increasing electric-vehicle production, swelling the value of shares of Tesla as well as of some electric-vehicle startups.
James Cox, who teaches corporate and securities law at Duke University, said the Securities and Exchange Commission should take action to deal with such misinformation, which can distort stock prices.
"The whole market has gone crazy," Cox said. "We need to throw a pretty clear line in the sand, I believe, about what is permissible and what isn't permissible."
The AP wrote a story about the supposed name change Monday after Gillies assured its reporter that it was serious, Easton said.
It was a similar story at USA Today, where a reporter specifically asked if it was a joke and was told "no," said the newspaper's spokeswoman, Chrissy Terrell.
"The company used this fake announcement as a way to manipulate respected reporters from trusted news outlets to get attention for their marketing campaign," she said. "We are disheartened that the company would choose this type of disingenuous marketing."
The USA Today reporter who was initially lied to was more blunt.
"This was not a joke," reporter Nathan Bomey wrote on Twitter. "It was deception. In case you haven't noticed, we have a misinformation problem in this country. Now you're part of it. Why should anyone trust you again?"
STOCK PRICE QUESTION
This week's Volkswagen incident bears some similarity to one in 2018 in which Tesla's CEO Elon Musk tweeted that he had the funding secured to take the company private -- a comment that drove up the stock price, Cox noted. Later, it was revealed that the funding had not been lined up. Musk and Tesla each agreed to pay $20 million in penalties to the SEC.
Erik Gordon, a business and law professor at the University of Michigan, said he thought that for the SEC to be interested, it would have to believe that VW knowingly issued the fake news release to manipulate its stock price.
"I don't think the SEC is going to see this as stock price manipulation any more than when General Motors or Ford or Toyota or anybody talks about their [electric-vehicle] future," Gordon said. "It is incredibly stupid, but if being stupid were illegal, a third of the CEOs in the U.S. would be in jail."
A message was left Tuesday seeking a comment from the SEC.
Tim Calkins, a clinical professor of marketing at Northwestern University, said April Fool's jokes are common in marketing. But he said it's rare for a company to deliberately mislead reporters.
"The problem is that in the short run, you can fool people, and it seems cute and entertaining," Calkins said. "But in the long run, you really do need positive and good relations with the media. For a company that already has credibility problems, this is really a strange move."
Information for this article was contributed by David Bauder and Andrew Dalton of The Associated Press.
The Link LonkApril 01, 2021 at 02:08PM
https://ift.tt/2PPUNyd
Voltswagen? Joke, carmaker says - Northwest Arkansas Democrat-Gazette
https://ift.tt/2BsGM2G
Joke
No comments:
Post a Comment