PR

DISASTERS
Volkswagen emissions scandal
By rigging the software system of their
diesel vehicles so that they can
successfully pass environmental tests,
Volkswagen has not only broken the law
in many jurisdictions but also blatantly
lied to its customers and stakeholders.
How was it detected

John German is the US co-lead of the

International Council on Clean Transportation
(ICCT), a not-for-profit organisation dedicated to
reducing vehicle emissions.
Mr German and his team abandoned standard
emissions lab tests and instructed researchers
to take their cars out on the roads to simulate
ordinary driving conditions.
What they found was explosive.
Impact on VW
The $2.8 billion criminal penalty and $1.5
billion civil penalty bring Volkswagen's total
cost to the United States to about $20 billion.
The company reached settlements last year of
more than $15 billion with consumers, the
government and California regulators. That
money is intended for buybacks, fixes, owner
compensation and environmental remediation.
VW will recall 8.5 million cars in Europe,
including 2.4 million in Germany and 1.2
million in the UK, and 500,000 in the US as a
result of the emissions scandal
Volkswagens response
the companysuspended several high-ranking executives.
owners who purchased their cars before September 17,
2015, can sell their cars back to Volkswagen
Owners who do not sell their cars back to Volkswagen will
receive between $5100 and $10,000 to compensate for
diminished resale value, plus a free emissions fix
As part of its Customer Goodwill package, Volkswagen
offered$1000 cash,a $500 prepaid Visa card to spend on
anything and another $500 cash card valid only at
Volkswagen dealerships
a$2000 cash rebatetoward a new car
Lessons that can be learnt
Incidents caused by internal actions
are the most difficult to manage,
especially if they are caused
deliberately.As many commentators
have said, all the organization can do is
to apologise, try and draw a line under
the incident and rebuild trust with their
customers. This is usually a long haul
and may cost billions of dollars.
Communicate often
 In an incident, organizations should
not be seen to put their own
interests before those of the
victims.
Information is key in an incident,
especially where public safety is
concerned.
Dont lie!
Samsung
Public
Relations
 Crisis
Samsung Note 7s battery was over-heating
causing to theflamingof the entire phone. The
company recalled Note 7 and abandoned the
model all together. These series of events
happened in September and Samsung tried
theirbest to move as fast as possible. Their main
reason wasto avoid a further escalation of the
crisis.
Samsung's Galaxy Note 7 has caught fire as
many as 112 times after only one month on sale .
 LOSS
Although, reports reveal that the
damage of the brand still remains
on its first steps, the tech giant is
already down on sales by 4%
($2.5bn).
The bungled launch led to a recall
of 2.5 million devices and losses
totalling more than $2 billion.
 1. Samsung needs to rebuild consumer trust, and one big way to do
Things Samsung has done to recover from Note 7 horror

that is to be fully transparent on what happened so that consumers

can be assured the root cause has been identified and thus wont
reoccur in future products. And by future products herefers
toGalaxy S8 that will bereleasedin March. In a packed press
conference at its offices in southern Seoul Monday, the world's
biggest smartphone maker again apologized to customers around
the world for the bungling of its product release. Phones were
initially recalled and replaced, but the replacement devices also
began to catch fire.
2. Samsung started making steps into regainingpublicsloyalty. By,
of course, offering compensation to the sufferers of the flaming
Note 7. They also, encouraged them to exchange the phone with a
different model; offered them coupons and mobile credits.
3. Theysent fireproof boxes and gloves to the owners in the US to
safely packand return Note 7.
4. focus on the upcoming Galaxy S8
 After the Note 7 blast
Samsung has announced its fourth-quarter earnings,
which the company's best performance in three years,
despite the loss on the Note 7 devices.
Samsung said that they gained KRW 9.2 trillion profit,
which is roughly around Rs. 52, 895 crores. the analysts
expected the profit to be KRW 8 trillion. The calculation
shows nearly KRW 1.2 trillion (Rs. 68,34697 crores)
more profit gains than predicted, which is roughly
around 10 percent more annual gains.