Troubled VW Calls Up Ex-Chrysler Chief

08 October 2004

Europe's largest car maker Volkswagen is recruiting reputed tough guy Wolfgang Bernhard to bring order to its troubled VW brand.

As chief operating officer of Chrysler Group in the US, and pencilled-in to head its Mercedes Benz division, Bernhard oversaw severe cost cutting, including job losses, and the development of new models.

He left his previous employers this summer, however, after causing alarm among Mercedes employees with remarks about bigger and better shake-ups and more cost slashing.

He is due to join Volkswagen's management board early next year and will take over as head of the VW-brand division by January 2006.

Bernhard will have responsibility for the Skoda, Bentley and Bugatti brands, as well as VW. He will also be part of the company's so far unremarkable efforts to develop premium cars.

The German giant has seen plummeting sales of its VW models in the US and China, while the European market has responded indifferently to the re-style of the flagship marque, the Golf.

In the first half of the year, Volkswagen had a negative net cash flow of €1.5 billion, ($1.8bn, £1bn) and net income fell 36% to €383 million.

Data sourced from Wall Street Journal Online; additional content by WARC staff