Carl Hahn

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Dr. Carl Horst Hahn
Carl H Hahn by Stuart Mentiply.jpg
Carl Horst Hahn
Born (1926-07-01) July 1, 1926 (age 87)
Chemnitz, Saxony, Germany
Known for chairman emeritus of Volkswagen Group

Dr. Carl Horst Hahn (born July 1, 1926) is chairman emeritus of the automotive concern Volkswagen Group. He served as the Chairman of the Board of Management of the group's parent company, Volkswagen AG (formerly Volkswagenwerk AG) from 1982 to 1993. During his tenure as chairman, he expanded the group's car production from two million units in 1982 to 3.5 million a decade later.

Early years[edit]

Hahn was born in the German state of Saxony and raised near Chemnitz. His father had been a senior manager of DKW and Auto Union, which later evolved into the Audi car brand. As a college student in Europe, he studied business administration at the University of Cologne and the University of Zurich; he also studied economics and politics in Great Britain and France. Hahn got his doctorate in Economics at the University of Berne in Switzerland. Before joining Volkswagen, he first worked as an economist in Paris.

Hahn joined VW in 1953 as an assistant of chairman Heinrich Nordhoff, and he quickly became head of sales promotion in VW's export department. Hahn was a favorite of Nordhoff's, and the chairman made him president of the company's U.S. subsidiary, Volkswagen of America, in 1959.

President of Volkswagen of America (1959-1965)[edit]

Under Hahn's leadership, Volkswagen of America began a national advertising campaign to attract more attention to its quirky Beetle sedan and Microbus wagon. Hahn soon hired the Doyle Dane Bernbach ad agency, which created some of the most memorable car ads in history.[citation needed] Its print and television ads for the Volkswagen brand respected the customer's intelligence, gave detailed information about Volkswagen's products, and made fun of the unorthodox qualities of the cars. The ads became cultural icons as much as the cars did, and Volkswagen enjoyed phenomenal sales in the U.S. in the 1960s and early 1970s. Hahn became a beloved figure in the United States before his return to Germany in 1965, having been affectionately nicknamed "Mr. Volkswagen" by VW enthusiasts.

While stationed in America, Hahn married the sister of romance novelist Danielle Steel, and their four children were all born in the U.S.

Chairman of Volkswagen AG (1982-1993)[edit]

Hahn left VW in 1973, to lead the German tire company Continental AG, but returned in 1982 to become chairman of Volkswagenwerk AG. Under his leadership, Volkswagen bought a majority interest in the Spanish car brand SEAT in 1986 after a cooperation agreement in 1982, and eventually owned the entire company by 1990.[1] After the fall of the Iron Curtain, in 1991 Volkswagen entered as a foreign partner in a joint venture with the Czech company Škoda Auto.[2] Hahn's acquisitions made Volkswagen a global force, and affirmed its place as Europe's largest automaker. In 1985 alone, Hahn was able to push VW's earnings up 140 percent to $225 million based on sales of more than $21 billion, and he was credited for pushing VW beyond the one-car strategy left over from the era of air-cooled Beetles and the early success of the Volkswagen Golf Mk1 in the 1970s. The second-generation edition, introduced in Europe in 1983 and in North America in 1984, was one of the bestselling cars of the 1980s worldwide. Two out of every three Volkswagens sold globally were Golfs. Hahn also cleaned up VW's business practices, uncovering an inside foreign exchange fraud, but its $300 million cost to Volkswagen ate into the very profits Hahn had helped the company make.

Ironically, given's Hahn's earlier success in leading Volkswagen of America, VW sales in the United States dropped during his tenure as VW chairman, from 171,281 units in 1982 to a paltry 75,873 ten years later (1992), largely to due intense competition from the American and Japanese carmakers. Sales in Canada were hardly better. Substandard product was another issue in North America. Soon after Hahn became chairman of VW, he tested an American Volkswagen Rabbit (the North American name for the original Golf) built at VW's Westmoreland Assembly Plant, which had opened in 1978, and he was deeply disappointed. "It felt like a Chevrolet," he complained. "If you want a Chevrolet, you should go to General Motors." The car had been re-engineered to drive like an American family sedan, with softer suspension and shock absorbers. Hahn fired Volkswagen of America president James McLernon, a former Chevrolet engineer who had been tapped by VW to get the Westmoreland plant up and running. Hahn then brought in new management at Volkswagen of America and kept the Westmoreland factory open to produce the second-generation Golf as a hedge against currency fluctuation between the German mark (DM) and the U.S. dollar, but inefficient production and soft sales in North America caused VW to close the plant in 1988.

It was widely believed by some observers, in fact, that Hahn had no desire to maintain strong sales in the very market he started out in. Hahn preferred to maximize profits for the company elsewhere, as North American car customers of the 1980s increasingly selected Japanese and Korean cars over European mass-market imports. This shift in American tastes caused Fiat and Renault to quit the United States and Canada during the decade, and the ill-fated Yugo brand followed suit in 1991, making Volkswagen the last European car brand selling mass-market products in those two countries. In the 1990s, under Hahn's successor, Dr. Ferdinand Piëch, VW's North American sales would eventually recover.

Legacy[edit]

Though Hahn was applauded for making the Volkswagen Golf the most popular car in Europe, and expanding the company through the SEAT and Škoda acquisitions, Volkswagen was in financial trouble by the end of his tenure as chairman, having lost 770 million marks in the eighties surge of the European car market, maintaining a low after-tax profit margin of 2.8 percent. Pre-tax profits went from three billion marks in 1989 to 1.785 billion marks just three years later. The problem was simple enough; Hahn could not keep manufacturing and development costs under control. The Volkswagen board decided that Hahn had been at the helm of Volkswagen too long, and replaced him with Piech.

Many people who knew or observed Hahn agreed he was a brilliant but flawed leader. Former Volkswagen of America president Bill Young, in an interview with journalist David Kiley, explained Hahn's record as chairman of VW: "Dr. Hahn had a lot on his plate in the 1980s, and [VW was] an organization that he was not suited or equipped to turn upside down the way Piech did." Automotive journalist David E. Davis offered a mixed review: "Hahn is a terrific man, and he did a lot of good things for Volkswagen, but he obviously lost interest in the American market by the time he came back in the 1980s based on the lack of attention the American division got."

Dr. Hahn's reputation has bounced back since his retirement, however, as the SEAT and Škoda brands have gone on to be an asset to the company, and his efforts to expand into China have also enhanced VW's worldwide stature. In Spain, SEAT not only made a profit two years after Volkswagen bought a majority of its stock but also provided a low-cost manufacturing outlet for other VAG group models as well as an opportunity to enter the unexploited by that time Spanish market under both SEAT and VW brand names; moreover during his presence in the VW leadership took place the construction of the SEAT's new plant in Martorell.

Dr. Hahn remains a respected businessman, and he is in demand as a public speaker.

Sources[edit]

  • Keller, Marryann, Collision: GM, Toyota, Volkswagen and the Battle To Own the 21st Century, 1993.
  • Kiley, David, "Getting The Bugs Out: The Rise, Fall and Comeback of Volkswagen in America", Adweek, 2002
  • Automobile magazine, July 1989, Paul Lienert column.

References[edit]

  1. ^ http://media.seat.com/en/company/368-seat-hoy.html
  2. ^ http://new.skoda-auto.com/com/about/tradition/history/Pages/History.aspx