Carl Hahn
Encyclopedia
Dr. Carl Horst Hahn 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.
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 1958.
While stationed in America, Hahn married the sister-in-law of romance novelist Danielle Steel
, and their four children were all born in the U.S.
, 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. 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
. 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.
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.
Emeritus
Emeritus is a post-positive adjective that is used to designate a retired professor, bishop, or other professional or as a title. The female equivalent emerita is also sometimes used.-History:...
of the automotive concern
Concern (business)
A concern is a German type of business group. It results from the merger of several legally independent companies an economic entity under unified management. These associated companies called "Group" companies....
Volkswagen Group
Volkswagen Group
Volkswagen Group is a German multinational automobile manufacturing group. , Volkswagen was ranked as the world’s third largest motor vehicle manufacturer and Europe's largest....
. He served as the Chairman of the Board of Management of the group's parent company
Parent company
A parent company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed as a subsidiary of the 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
Hahn was born in the German state of SaxonySaxony
The Free State of Saxony is a landlocked state of Germany, contingent with Brandenburg, Saxony Anhalt, Thuringia, Bavaria, the Czech Republic and Poland. It is the tenth-largest German state in area, with of Germany's sixteen states....
and raised near Chemnitz
Chemnitz
Chemnitz is the third-largest city of the Free State of Saxony, Germany. Chemnitz is an independent city which is not part of any county and seat of the government region Direktionsbezirk Chemnitz. Located in the northern foothills of the Ore Mountains, it is a part of the Saxon triangle...
. His father had been a senior manager of DKW
DKW
DKW is a historic German car and motorcycle marque. The name derives from Dampf-Kraft-Wagen .In 1916, the Danish engineer Jørgen Skafte Rasmussen founded a factory in Zschopau, Saxony, Germany, to produce steam fittings. In the same year, he attempted to produce a steam-driven car, called the DKW...
and Auto Union
Auto Union
Auto Union was an amalgamation of four German automobile manufacturers, founded in 1932 and established in 1936 in Chemnitz, Saxony, during the Great Depression. The company has evolved into present day Audi, as a subsidiary of Volkswagen Group....
, which later evolved into the Audi
Audi
Audi AG is a German automobile manufacturer, from supermini to crossover SUVs in various body styles and price ranges that are marketed under the Audi brand , positioned as the premium brand within the Volkswagen Group....
car brand. As a college student in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, he studied business administration at the University of Cologne
University of Cologne
The University of Cologne is one of the oldest universities in Europe and, with over 44,000 students, one of the largest universities in Germany. The university is part of the Deutsche Forschungsgemeinschaft, an association of Germany's leading research universities...
and the University of Zurich
University of Zurich
The University of Zurich , located in the city of Zurich, is the largest university in Switzerland, with over 25,000 students. It was founded in 1833 from the existing colleges of theology, law, medicine and a new faculty of philosophy....
; he also studied economics and politics in Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. Hahn got his doctorate in Economics at the University of Berne
University of Berne
The University of Bern is a university in the Swiss capital of Bern and was founded in 1834. It is regulated and financed by the Canton of Bern. It is a comprehensive university offering a broad choice of courses and programmes in eight faculties and some 160 institutes. The university is an...
in Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
. Before joining Volkswagen, he first worked as an economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
in Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
.
Hahn joined VW in 1953 as an assistant of chairman Heinrich Nordhoff
Heinrich Nordhoff
Heinz Heinrich Nordhoff was a German engineer famous for his leadership of the Volkswagen company as it was rebuilt after World War II....
, 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.
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 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-in-law of romance novelist Danielle Steel
Danielle Steel
Danielle Fernandes Dominique Schuelein-Steel , better known as Danielle Steel, is an American romantic novelist and author of mainstream dramas....
, and their four children were all born in the U.S.
Chairman of Volkswagen AG (1982-1993)
Hahn left VW in 1973, to lead the German tire company Continental AGContinental AG
Continental AG, internally often called Conti for short, is a worldwide leading German manufacturer of tires, brake systems, vehicle stability control systems, engine injection systems, tachographs and other parts for the automotive and transport industries. The company is based in Hanover, Germany...
, but returned in 1982 to become chairman of Volkswagenwerk AG. Under his leadership, Volkswagen bought a majority interest in the Spanish
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
car brand SEAT
SEAT
SEAT, S.A. is a Spanish automobile manufacturer founded on May 9, 1950 by the Instituto Nacional de Industria , a state-owned industrial holding company....
in 1986 after a cooperation agreement in 1982, and eventually owned the entire company by 1990. After the fall of the Iron Curtain
Iron Curtain
The concept of the Iron Curtain symbolized the ideological fighting and physical boundary dividing Europe into two separate areas from the end of World War II in 1945 until the end of the Cold War in 1989...
, in 1991 Volkswagen entered as a foreign partner in a joint venture with the Czech company Škoda Auto
Škoda Auto
Škoda Auto , more commonly known as Škoda, is an automobile manufacturer based in the Czech Republic. Škoda became a wholly owned subsidiary of the Volkswagen Group in 2000, positioned as the entry brand to the group...
. 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
Volkswagen Golf Mk1
In May 1974, Volkswagen presented the first-generation Golf as a modern front-wheel-drive, hatchback replacement for the Volkswagen Beetle.-History:...
in the 1970s. The second-generation edition
Volkswagen Golf Mk2
The Volkswagen Golf Mk2 succeeded the Mk1 as Volkswagen's volume seller from 1983 and remained in production until late 1992. In comparison to its predecessor, its wheelbase grew slightly , as did exterior dimensions . Weight was up accordingly by about...
, 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
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
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
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
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
Volkswagen Westmoreland Assembly Plant
The Volkswagen Westmoreland Assembly Plant is a manufacturing plant formerly operated by Volkswagen of America , south of Pittsburgh in Westmoreland County, Pennsylvania near New Stanton. The complex manufactured 1.15 million vehicles from 1978 to 1988...
, which had opened in 1978, and he was deeply disappointed. "It felt like a Chevrolet
Chevrolet
Chevrolet , also known as Chevy , is a brand of vehicle produced by General Motors Company . Founded by Louis Chevrolet and ousted GM founder William C. Durant on November 3, 1911, General Motors acquired Chevrolet in 1918...
," he complained. "If you want a Chevrolet, you should go to General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
." 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
James McLernon
James W. McLernon is a retired automobile company executive who worked for Chevrolet while at General Motors as an engineer. In 1976, He became the first president of manufacturing at Volkswagen of America, the U.S. division of Volkswagen AG...
, 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
Fiat
FIAT, an acronym for Fabbrica Italiana Automobili Torino , is an Italian automobile manufacturer, engine manufacturer, financial, and industrial group based in Turin in the Italian region of Piedmont. Fiat was founded in 1899 by a group of investors including Giovanni Agnelli...
and Renault
Renault
Renault S.A. is a French automaker producing cars, vans, and in the past, autorail vehicles, trucks, tractors, vans and also buses/coaches. Its alliance with Nissan makes it the world's third largest automaker...
to quit the United States and Canada during the decade, and the ill-fated Yugo
Zastava Koral
The Zastava Koral , also known simply as the Yugo, was a subcompact car built by the Zastava corporation. The first Yugo 45 was handmade on 2 October 1978....
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
Ferdinand Piëch
Ferdinand Karl Piëch is an Austrian business magnate, engineer and executive who is currently the chairman of the supervisory board of Volkswagen Group....
, VW's North American sales would eventually recover.
Legacy
Though Hahn was applauded for making the Volkswagen GolfVolkswagen Golf
The Volkswagen Golf is a small family car manufactured by Volkswagen since 1974 and marketed worldwide across six generations, in various body configurations and under various nameplates – as the Volkswagen Rabbit in the United States and Canada , and as the Volkswagen Caribe in Mexico .The...
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
David E. Davis
David Evan Davis, Jr. was an automotive journalist and magazine publisher widely known as a contributing writer, editor and publisher at Car and Driver magazine and as the founder of Automobile magazine....
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
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
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
- 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.