Could Volkswagen AG be the next German automaker to bolt Michigan?
08-14-07, 08:27 AM
#1
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Could Volkswagen AG be the next German automaker to bolt Michigan?
Could Volkswagen AG be the next German automaker to bolt Michigan?
The North American headquarters of the VW and Audi brands, based in Auburn Hills, is rife with speculation that a new CEO from Germany, Stefan Jacoby, will arrive Sept. 1 and use a promised restructuring to move some -- if not all -- of its 2,000 taxpaying jobs from Michigan to new headquarters on the East Coast, most likely to a site in suburban Washington, D.C., or North Carolina.
Officially, the automaker isn't saying anything. Yet in an e-mail sent Friday to Audi of America's 320 employees, Audi of America's Executive Vice President Johan de Nysschen acknowledged "stressful times" and said he could not "provide any more direction or comments to assuage the mountain of rumors running through our organization. Things will become clearer after the corporate realignment takes place in early September.
"As the head of Audi of America, I am complicit in the current state of affairs," he wrote, neglecting to mention that Audi's brass for some time has been pushing to move its headquarters east. "What I am able to tell you is that the reality is not nearly as severe as some of the rumors would suggest."
Which basically means nothing considering the recent spate of corporate double-talk meted out by the boys at Daimler AG, followed by the boys at "We-love-our-management-team-until-we-don't" Chrysler LLC, to name two examples. What they do -- not what they say -- is what matters.
No final decision has been made, I'm told, on whether VW will move all, some or none of its North American operations -- which include VW, Audi, VW Credit and shared central staff -- to the East Coast, but one could come as soon as next month. Most likely to depart, should it come to that, would be headquarters officials, brand executives and the managements of sales, marketing, communications and human resources.
The thinking behind a move is that it ostensibly would distance Audi and VW from troubled Michigan and a beleaguered industry. Second, it would enable parent VW to burnish its brands on the coasts by attracting talent that otherwise wouldn't consider opportunities here.
And third, it would theoretically jump-start flagging energy at VW and Audi in the States, partly by culling Michiganians unwilling to uproot. That's not unlike a byproduct of Nissan CEO Carlos Ghosn's decision to move its North American headquarters to Nashville from California, proving few things test loyalty more than the prospect of trading Newport Beach for the Grand ol' Opry.
Yet another blow to Mich.?
Audi wants "a luxury perspective and orientation and they don't think they can get it here" in Michigan, says a source familiar with the automaker's thinking. "If this were to happen, I'd be worried about the reaction."
The mere fact that a VW exit is being seriously considered couldn't come at a worse time for the Detroit-based industry and the state of Michigan, beset by 7.2 percent unemployment and the delusion that it remains the heart of the North American auto industry. To whom?
Nor could it come at a worse time for Gov. Jennifer Granholm, who is scheduled to brief the media today and leave Saturday on her five-day investment mission to Germany and Sweden. A meeting with neither VW nor Audi officials is on the governor's agenda, her spokeswoman confirmed Monday.
Would it matter if it was? Daimler's dumping of Chrysler, enormous pressure on the domestic business of General Motors and Ford Motor, their sullied image in Washington, thousands of lost blue- and white-collar jobs, bankruptcies of Delphi, Tower Automotive and others are combining to give the Detroit-based industry a collective black eye that rivals like VW and Audi would desperately like to avoid, thank you.
It's just business, but it hurts
It's debatable, if not laughable, that would-be customers of Audi or VW would know -- or care -- where their North American operations are based. Do you suppose would-be customers of BMW or Mercedes-Benz know their U.S. sales and marketing arms are based in New Jersey?
Three more credible explanations: First, that the long tales of woe surrounding Detroit's automakers, their hometown and Michigan are essentially liabilities to recruiting outsiders and promoting insiders. Poll most Germans and nine out of 10 probably would choose a three-year tour in New York or Washington over Detroit.
Second, that keeping the North American headquarters of VW and Audi in Metro Detroit virtually guarantees they will be overshadowed by the hometown automakers and their troubles.
Finally, like the early days of the failed DaimlerChrysler marriage when Jürgen Schrempp and the boys looked for every chance to meet in New York and avoid Auburn Hills altogether, the prospect of coming to America for meetings and a little fun in, say, the nation's capital trumps three days in Detroit.
Would there be a negative reaction locally if Audi or VW or both (and posh Bentley) decamped for the East Coast? Probably. Would fear of that reaction deter a company now controlled by Supervisory Board Chairman Ferdinand Piëch, stepping steadily toward total control (through his family's Porsche holdings) of VW? No way.
Look, it was Porsche, VW's controlling shareholder, that stunned the major domos when it said it would skip next year's North American International Auto Show because Detroit and the Midwest are not key markets for Porsche -- the coasts are.
Should VW's likely Michigan smackdown come as a surprise? Not really, which is the worst part of all.
The North American headquarters of the VW and Audi brands, based in Auburn Hills, is rife with speculation that a new CEO from Germany, Stefan Jacoby, will arrive Sept. 1 and use a promised restructuring to move some -- if not all -- of its 2,000 taxpaying jobs from Michigan to new headquarters on the East Coast, most likely to a site in suburban Washington, D.C., or North Carolina.
Officially, the automaker isn't saying anything. Yet in an e-mail sent Friday to Audi of America's 320 employees, Audi of America's Executive Vice President Johan de Nysschen acknowledged "stressful times" and said he could not "provide any more direction or comments to assuage the mountain of rumors running through our organization. Things will become clearer after the corporate realignment takes place in early September.
"As the head of Audi of America, I am complicit in the current state of affairs," he wrote, neglecting to mention that Audi's brass for some time has been pushing to move its headquarters east. "What I am able to tell you is that the reality is not nearly as severe as some of the rumors would suggest."
Which basically means nothing considering the recent spate of corporate double-talk meted out by the boys at Daimler AG, followed by the boys at "We-love-our-management-team-until-we-don't" Chrysler LLC, to name two examples. What they do -- not what they say -- is what matters.
No final decision has been made, I'm told, on whether VW will move all, some or none of its North American operations -- which include VW, Audi, VW Credit and shared central staff -- to the East Coast, but one could come as soon as next month. Most likely to depart, should it come to that, would be headquarters officials, brand executives and the managements of sales, marketing, communications and human resources.
The thinking behind a move is that it ostensibly would distance Audi and VW from troubled Michigan and a beleaguered industry. Second, it would enable parent VW to burnish its brands on the coasts by attracting talent that otherwise wouldn't consider opportunities here.
And third, it would theoretically jump-start flagging energy at VW and Audi in the States, partly by culling Michiganians unwilling to uproot. That's not unlike a byproduct of Nissan CEO Carlos Ghosn's decision to move its North American headquarters to Nashville from California, proving few things test loyalty more than the prospect of trading Newport Beach for the Grand ol' Opry.
Yet another blow to Mich.?
Audi wants "a luxury perspective and orientation and they don't think they can get it here" in Michigan, says a source familiar with the automaker's thinking. "If this were to happen, I'd be worried about the reaction."
The mere fact that a VW exit is being seriously considered couldn't come at a worse time for the Detroit-based industry and the state of Michigan, beset by 7.2 percent unemployment and the delusion that it remains the heart of the North American auto industry. To whom?
Nor could it come at a worse time for Gov. Jennifer Granholm, who is scheduled to brief the media today and leave Saturday on her five-day investment mission to Germany and Sweden. A meeting with neither VW nor Audi officials is on the governor's agenda, her spokeswoman confirmed Monday.
Would it matter if it was? Daimler's dumping of Chrysler, enormous pressure on the domestic business of General Motors and Ford Motor, their sullied image in Washington, thousands of lost blue- and white-collar jobs, bankruptcies of Delphi, Tower Automotive and others are combining to give the Detroit-based industry a collective black eye that rivals like VW and Audi would desperately like to avoid, thank you.
It's just business, but it hurts
It's debatable, if not laughable, that would-be customers of Audi or VW would know -- or care -- where their North American operations are based. Do you suppose would-be customers of BMW or Mercedes-Benz know their U.S. sales and marketing arms are based in New Jersey?
Three more credible explanations: First, that the long tales of woe surrounding Detroit's automakers, their hometown and Michigan are essentially liabilities to recruiting outsiders and promoting insiders. Poll most Germans and nine out of 10 probably would choose a three-year tour in New York or Washington over Detroit.
Second, that keeping the North American headquarters of VW and Audi in Metro Detroit virtually guarantees they will be overshadowed by the hometown automakers and their troubles.
Finally, like the early days of the failed DaimlerChrysler marriage when Jürgen Schrempp and the boys looked for every chance to meet in New York and avoid Auburn Hills altogether, the prospect of coming to America for meetings and a little fun in, say, the nation's capital trumps three days in Detroit.
Would there be a negative reaction locally if Audi or VW or both (and posh Bentley) decamped for the East Coast? Probably. Would fear of that reaction deter a company now controlled by Supervisory Board Chairman Ferdinand Piëch, stepping steadily toward total control (through his family's Porsche holdings) of VW? No way.
Look, it was Porsche, VW's controlling shareholder, that stunned the major domos when it said it would skip next year's North American International Auto Show because Detroit and the Midwest are not key markets for Porsche -- the coasts are.
Should VW's likely Michigan smackdown come as a surprise? Not really, which is the worst part of all.
08-14-07, 09:58 AM
#2
Lexus Fanatic
iTrader: (20)
Interesting. I'd forgotten about the Nissan move too that it mentions, which everyone said was as dumb as rocks. Well gee, looks like Nissan's doing great. 
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