VW and Deutsch Make ‘Minimal’ Cuts for 2016

By Patrick Coffee Comment

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When the Volkswagen emissions scandal hit last September, the first question many of our readers posed was “what does this mean for Deutsch?” The answer, so far, is very little.

Just today, CEO Matthias Mueller told German media, “We are quite confident that by regaining the trust of our customers, of the public and of our remaining shareholders, we will have a good year 2016.” But he added a big caveat: “We will certainly be a loser in the U.S.”

One of the big challenges in the U.S. concerns our stricter emissions standards. EPA regulators are currently pressuring the company to make more electric cars in order to help pay its fines as it struggles to update the offending models, though analysts believe VW’s best option may be to simply buy back all the worst polluters still driving American roads.

The company has made some attendant adjustments to its North American marketing plans, leading the L.A. offices of its agency of record Deutsch to lay off a small number of staffers who worked on the VW business. We hear that the total number of departures was 10 or less and that many if not most of those affected worked on the production side of the business. But some of our agency contacts in the L.A. area have begun to receive resumes.

The implications of this move on the larger VW account are unclear, and Deutsch has continued to work on the business regularly since last summer’s press push for its Golf spot starring Michael “Police Academy” Winslow.

But today the company’s stock price is less than half what it was one year ago–and its most recent European campaign by adam&eveDDB was all about apologizing and moving beyond the scandal.

Deutsch and VW both declined to comment directly for this post, though sources close to the matter told us that the changes made were “very minimal” and do not represent any major shifts in VW’s larger North American marketing plans for 2016.

Still, we can expect more moves to come this year, especially if U.S. sales totals take a hit as large as the one Mueller seemed to predict at today’s press conference.

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