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VOL. 37 | NO. 50 | Friday, December 13, 2013
VW replaces head of struggling US division
FRANKFURT, Germany (AP) - Automaker Volkswagen said Thursday it was replacing the head of its U.S. division, which has struggled to reach sales goals.
The company said Jonathan Browning, 54, was leaving his job as president and CEO of Volkswagen Group of America "for personal reasons and returning to the U.K."
His replacement is Michael Horn, 51, the company's global head of after-sales service, repair and components. Horn was formerly head of sales for Europe.
Through November, U.S. sales for the Volkswagen brand have fallen more than 5 percent to just under 374,000, while the overall market has grown more than 8 percent.
This year's decline came after VW sales skyrocketed more than 30 percent in 2012. But it has lagged this year as overall U.S. sales increased. The company's top-selling models weren't able to match up to other automakers in two of the most highly competitive segments of the industry. Sales of the compact Jetta sedan fell 4.4 percent, while Passat midsize sedan sales declined 2.1 percent through November, according to Autodata Corp.
Analyst Thomas Libby at IHS Automotive said that after "very effective" launches of redesigned Passat and Jetta models in the U.S. market, Volkswagen had taken a break in updating its offerings.
"There is general agreement that new product is a major factor in performance in the U.S. market, and VW has had a dearth, a pause, in product launches," he said.
Manufacturers often try to attract customers with so-called facelifts - relatively inexpensive changes to the way the front end and back end of the car look, for instance - in between major redesigns. Completely new versions can take years and incur heavy design and development costs.
Volkswagen also lacks competitive products in some key U.S. market categories. Libby singled out the non-luxury crossover segment, where the company's Tiguan model was no longer competitive on price or va lue comparisons.
Libby noted that the local country heads such as Browning have something to say about the model cycle but that the ultimate call is made by the company's central management.
"They have input, they can say, 'We need this, we don't need this,' but they don't make the decision," he said.
The company also said Ludger Fretzen, the head of Volkswagen and Audi brands in Spain, will succeed Terence Johnsson as its head of passenger car brand sales for North America.
Volkswagen AG, based in Wolfsburg, Germany, makes cars under the Volkswagen, Audi, and Bentley brands, among others. It has a factory in Chattanooga, Tennessee, and has its U.S. headquarters in Herndon, Virginia, along with administrative offices in Auburn Hills, Michigan.
The leadership shuffle comes amid a debate over unionizing Volkswagen's only U.S. plant in Tennessee. The plant stands alone among VW's major factories worldwide in that it has no formal worker representati on, whether through a union or a German-style works council.
The United Auto Workers union says it has collected enough signatures to be recognized outright, though the company could also call for a secret ballot.
The issue is fraught with political implications, as southern Republicans fear a UAW foothold among foreign automakers would make the region less attractive to future investment. But the company also faces pressure from within over the matter, as half of its supervisory board is made up of labor interests.