Stefan Jacoby, Leaving VW for Volvo, May Have Felt Passed Over

Last Updated Jun 28, 2010 1:25 PM EDT

Speculation is rife about Stefan Jacoby's abrupt departure as head of Volkswagen's U.S. operations, apparently to head Volvo worldwide. His leaving took a lot of people both inside and outside of Volkswagen by surprise, though nobody wants to say that on the record.

The man is ambitious, and though his position in the U.S. was very visible, it wasn't seen as the top echelon if your view is from the company's Wolfsburg headquarters. At Volvo, Jacoby will be running global operations. Christoph Stuermer, a Frankfurt-based analyst and director in the IHS Automotive Group, believes that Jacoby (a nephew of the company's former CEO) may have felt passed over when VW named somebody else to head Skoda last month. "Running a brand [like Skoda] is much more prestigious than running a market," Stuermer said.

Jacoby was a VW golden boy, and the company's face in the U.S., since 2007. He had engineered both the building of a $1 billion plant in Chattanooga (now nearing completion to build a new mid-sized sedan) and an ambitious recovery plan. Not many believe that Volkswagen (plus Audi) will sell a million cars in the U.S. by 2018, but nearly everyone agreed that the hard-charging Jacoby would kill himself trying.

VW, apparently caught off guard, was forced to send out a somewhat confusing statement about Jacoby's situation being unclear until his contract was reviewed. The Chattanooga Area Chamber of Commerce, which had worked closely with Jacoby, was dumbfounded. "This one is a complete surprise," said a source that has been close to company operations.

But VW may ultimately gain from Jacoby's departure. As Stuermer points out, the interim team named Thursday is well-positioned to lead the company as it introduces both a $16,000 Jetta and the New Mid-Sized Sedan (NMS) that will be produced in Chattanooga.

Michael Lohscheller, an upstart at just 41 and the former U.S. chief financial officer, will head the U.S. Volkswagen Group (including Audi, Bentley, Bugatti and Lamborghini). Running VW of America (the U.S. brand) will be Mark Barnes, who has been COO since 2007 and is a former Chrysler executive.

"You want a German in a lead role to talk to the German controller and planning guys," Stuermer said. "And an American who really understands the market to run the company." And so it has come to pass. Now the new team will have to fulfill the mission Jacoby left behind, virtually doubling the company's presence in the market from two percent now to four percent by 2012.

Jacoby, a proven strategist, will have his hands full at Volvo, where company spokesmen aren't yet talking (other than to acknowledge their incoming CEO). The company is transitioning to Chinese ownership under Zhejiang Geely, and Jacoby's work for VW in China might come in handy. Volvo could emerge as quite a prestige brand in the burgeoning Chinese market. Reviving its fortunes in the rest of the world (especially in the U.S., where its luster has been tarnished) will probably be the harder task.


Photo: Jim Motavalli