Volkswagen's New U.S. Chief May Need a Crash Course on the American Market
In choosing Jonathan Browning to head its Volkswagen Group in the U.S., VW has picked a veteran British-born executive with a long industry track record, albeit one at sometimes-struggling companies, including General Motors' European divisions and Jaguar under Ford's not altogether happy ownership.
The problem is that Browning hasn't been seasoned in the unique requirements of the American market, which has long been a challenge for VW (which has been doing well elsewhere). When he met the press in Washington, D.C., he said that he feels "at home in the U.S.," having had two previous postings here. But VW could later come up only with a brief stint in 2008. The bulk of his career was in Britain, working for General Motors and Ford. There's no doubt he's seasoned, but getting the U.S. right is a tough challenge for any executive.
Browning, 51 (pictured at left), is replacing a VW superstar, Stefan Jacoby, who definitely understands the U.S. market and was on a trajectory to relaunch the company here. Jacoby inaugurated construction of the company's $1 billion plant in Chattanooga (scheduled to open in a few months with a new mid-sized sedan) and recently spearheaded the new Jetta launch. Jacoby is now the global head of Volvo. On the evidence of his Washington press conference, Browning may not be as prone to bold statements about VW's future in the U.S. as was Jacoby. He stuck closely to earlier company pronouncements that it could be profitable in the U.S. in 2013, and wants to be selling a million vehicles (800,000 VWs and 200,000 Audis) by 2018.
Obviously, Browning didn't put the British auto industry on deathwatch, but he had to make some painful decisions.
In May of 2006, Browning was at the helm as chairman of GM's Vauxhall subsidiary when it announced that it was cutting shifts at its Ellesmere Port plant from three to two, and thus eliminating 900 jobs. Ellesmere Port, now Vauxhall's only British plant, survived closure fears, but Browning said at the time that it would only stay competitive against company plants in Germany and Belgium if it reduced the number of "man hours" it took to produce a car. Browning moved on to become head of GM's global sales, service and marketing in 2008, but left last October "to pursue other interests."
Back in 2001, Browning was near the end of a four-year Ford stint as managing director at Jaguar when he predicted 100,000 annual sales for the brand globally. "That's pretty phenomenal when you consider the company only went through the 50,000-unit barrier as recently as 1998," he said. But for 2009 sales were back around 50,000, and the company had been spun off to Tata in India. You can't blame Browning for the fact that Jaguar tanked after his watch, but he didn't lead a huge renaissance there, either.
James Bell, who covers the auto space for Kelley Blue Book, sees the appointment positively, believing that Browning's Ford and GM experience (even if it was in Europe) have given him an appreciation of the special nature of the U.S. market. Bell called the announcement "a perfect balance between reigniting passionate stewardship of the proud brand and establishing a level of business experience and honesty necessary to rebound from years of losses." VW has to recapture the magic it once had as the top import brand in the U.S., he said. But the high point was 40 years ago.
Browning joined VW in June. He acknowledged that VW has faced a number of years of losses in the American market, and has never topped its banner year of 1970 -â€" when Beetle and Microbus sales were riding high, and Americans were only marginally familiar with Toyota and Honda.
"Cars and trucks are "an inseparable part of American life," Browning said at the press conference, and the key to the company's revival, he said at the press conference, is making sure that U.S. tastes are taken into account when VW develops products. "The next generation Beetle is squarely focused on the U.S. market, which we expect will be the largest for the car," Browning said. "We have to ensure that the voice of the U.S. consumer is heard throughout the global product community."
The problem is that it might take a while for Browning to really be in tune with "the voice of the U.S. consumer." The company sometimes treats marketing to Americans as an afterthought. The new Jetta is a buttoned-down European that VW tried, perhaps a little too hard, to wrap in the American flag -- by introducing it in Times Square with singer Katy Perry.
Browning also admitted that VW has faced some customer satisfaction issues, and will focus on dealer relations going forward. Christian Klingler, a VW AG board member, said in Washington that the company is now "totally focused" on consumer satisfaction.
Browning should be careful not to get too nostalgic for VW's good old days, when it had a starring role in the Woodstock era. Vauxhall had some golden moments, too. Browning recalled the hijinks in 1964 when 62 students piled into a Microbus. "It's too bad we didn't have YouTube around then," he said.
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Photos: Volkswagen