New VWoA CEO Jonathan Browning.
Volkswagen has appointed industry veteran Jonathan Browning the new chief executive officer of its U.S. subsidiary, filling a critical vacancy created by the unexpected departure of Volkswagen of America CEO Stefan Jacoby, who left unexpectedly in June.
It comes as something of a homecoming for Browning, who has lived in the U.S. twice – once to earn an MBA from Duke University – and who previously worked for both General Motors and Ford Motor Co.
“We know we have a lot of work to do,” Browning declared during a news conference at the National Press Club, in Washington, D.C., not far from the automaker’s suburban U.S. headquarters. Noting that VW aims to boost sales to 800,000 by 2018, the new CEO said, “We have set ourselves some big goals, but I am confident we can do this.”
With an expertise in marketing and sales, the 51-year-old Browning has had something of an unusual career for a European automotive executive, moving from one maker to another a number of times since launching his career at General Motors in 1981. He eventually left for Ford, where he served as Managing Director of Jaguar from 1997 through 2001. He eventually returned to GM, but left following the maker’s plunge into bankruptcy.
In June of this year, Browning resurfaced, this time at Volkswagen headquarters, in Wolfsburg, Germany, where he was put in charge of national sales efforts for all 10 of the company’s brands. It was a plumb assignment overseeing sales that have risen, on a global scale to 6 million annually.
That was only weeks before VWoA CEO Jacoby tendered his resignation. Insiders say that the German executive felt his climb up the VW corporate ladder had halted and decided to chance signing on with Volvo, the Swedish maker that had just been purchased by the Chinese.
During his debut meeting with the media, Browning took a cautious approach on several issues pleading for time to become familiar with his new duties. There is no question he will have a lot of challenges ahead. VW has been struggling to reverse years of red ink in the American market, for one thing.
“We expect to be in profit in the market by 2013,” the British-born Browning said, repeating the previously-stated corporate position. “I’m sure those statements were based on some sound analysis.”
To get there, VW is pushing to regain long-lost momentum. It is currently running well short of the sales peaks it set in the late 1960s and early ‘70s, when annual volumes topped 600,000. For the first eight months of 2010, VWoA sold just 240,000 vehicles in the U.S., though that was up 21% compared to the same period in 2009.
To build demand the company is not only expanding its line-up but introducing new products specifically developed for the American market. The new Jetta is a good example, the latest design heavily influenced by U.S. consumer tastes. That will be followed by an all-new midsize sedan and a complete remake of the once-popular Volkswagen Beetle.
“We will make sure, going forward, that the voice of the U.S. market is heard loud and clearly throughout our worldwide product development system,” Browning proclaimed.
The as yet-unnamed new midsize sedan will be produced at a new assembly plant now being completed in Chattanooga, Tennessee. That factory anchors what VW Board Member Christian Klingler, who oversees American operations, describes as a $4 billion commitment to the U.S. market.
“Our (global) focus is sustainable growth,” he said, adding that, “We know the United States has to be one of the most important milestones for achieving that growth.”
New product alone won’t solve everything, the two executives acknowledged. Analysts blame ongoing quality problems for some of VW’s struggles in the market. The maker has repeatedly lagged well below industry average in such influential studies as the J.D. Power Initial Quality Survey.
While Browning said that improving customer satisfaction will be one of his top priorities, Michael Lohscheller, who had served as Interim CEO, following Jacoby’s departure, promised that “over the next 12 to 18 months you should see some very big improvements.”
Meeting those quality goals will be critical to achieving both VWoA’s sales and profit targets.