Carl Hahn
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Dr. Carl Horst Hahn (born July 1, 1926, in Germany) is chairman emeritus of the automobile company Volkswagen AG. He served as Volkswagen's chief executive officer from 1982 to 1993. During his tenure as chairman of Volkswagen, he expanded the firm's auto production from two million units in 1982 to 3.5 million a decade later.
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[edit] Early years
Hahn was born in the German state of Saxony and raised near Chemnitz (later called Karl-Marx-Stadt when governed by the German Democratic Republic, now called Chemnitz again). 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 Bern 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 1958.
[edit] President of Volkswagen of America (1958-1965)
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. 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 loved 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-in-law of romance novelist Danielle Steel (Marisa Traina), and their four children were all born in the U.S.
[edit] Chairman of Volkswagen AG (1982-1993)
Hahn left VW in 1973 to lead the German tire company Continental AG, but returned in 1982 to become chairman. Under his leadership, Volkswagen bought a majority interest in the Spanish car brand SEAT in 1986 and owned the entire company by 1990. After the fall of the Berlin Wall, Hahn purchased the Czech company Škoda. Hahn's ventures made VW 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 leftover from the era of air-cooled Beetles and the the early success of the Volkswagen Golf in the 1970s. This didn't prevent customers worldwide, however, from favoring the Golf hatchback two-to-one over VW's other models put together. The second-generation edition, introduced in Europe in 1983, was one of the bestselling cars of the 1980s worldwide. Hahn also cleaned up VW's business practices, uncovering an inside foreign exchange fraud, but its $300 billion 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 County, Pennsylvania 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 hired new management for Volkswagen's Pennsylvania plant and kept it open to produce the second-generation Golf as a hedge against currency fluctuation between the German mark and the U.S. dollar, but inefficient production and so-so 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. As North American car customers of the 1980s increasingly selected Japanese and Korean cars over European mass-market imports (which caused Fiat and Renault to quit the United States and Canada during the decade, making Volkswagen virtually the last European car brand selling mass-market products in those two countries), Hahn preferred to maximize profits for the company elsewhere. VW's North American sales would recover in the 1990s under Hahn's successor, Dr. Ferdinand Piech.
[edit] Legacy
Though Hahn was appaluded for making the Volkswagen Golf the most popular car in Europe and expanding the company through the SEAT and Skoda acquisitons, 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. Pretax 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 Skoda brand has 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 made a profit two years after Volkswagen bought a majority of its stock, and it also gained a low-cost manufacturing outlet for the company that proved invaluable as VW later sought to cut expenses elsewhere.
Dr. Hahn remains a respected businessman, and he is in demand as a public speaker.
[edit] Sources
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.
