Wolfgang Bernhard





Chief Executive Officer of Volkswagen

Wolfgang Bernhard

Born Wolfgang Ayerle in September, 1960, in Böhen, Germany. Education: Earned master's degree in electrical engineering and economics from the Technical University, Darmstadt, Germany, 1986; Columbia University, M.B.A., 1988; earned doctorate in economics from the Johann Wolfgang Goethe University, Frankfurt, Germany, 1990.

Addresses: Office —Volkswagen AG, D-38436 Wolfsburg, Germany.

Career

Management consultant with McKinsey & Company for Mercedes-Benz, 1990–92; Mercedes-Benz, project manager, 1992–94; manager for S-Class assembly after 1994, and responsible for the launch of the S-Class line, 1998; chief executive officer for Mercedes-AMG (high-performance division), 1999; named deputy member of the board of management and chief operating officer, November, 2000; full member of the board of management (now DaimlerChrysler AG), September 2002–July 2004; joined Volkswagen AG, October, 2004, and became full member of the board of management, February, 2005; head of Volkswagen brand group, May, 2005–.

Sidelights

Wolfgang Bernhard was tapped to lead the troubled Volkswagen automotive group in October of 2004. Both feared and admired in the auto industry, the German executive had risen to one of the top posts at DaimlerChrysler, the German-American firm created by the merger of Mercedes-Benz and Chrysler, but resigned after being bypassed to lead its Mercedes-Benz car group earlier that year. Bernhard had earned his reputation as one of a new generation of visionary automotive executives for leading Chrysler through an impressive turnaround, and auto-industry analysts deemed him the ideal candidate for doing the same with Volkswagen.

Born in 1960 as Wolfgang Ayerle, Bernhard later took his mother's maiden name. He grew up as one of nine children in Böhen, a town in the southern German state of Bavaria. He spent most of the 1980s in school, first at the Technical University of Darmstadt, where he received a master's degree in electrical engineering and economics in 1986, and then in New York City at Columbia University, which granted him a graduate business degree in 1988. Returning to Germany, he earned a doctorate in economics, with a focus on international exchange rate risks, from the Johann Wolfgang Goethe University of Frankfurt in 1990. During his early college years, he reportedly earned income as a busker, playing guitar in the streets and public-transit stations for spare change.

Bernhard spent two years with McKinsey & Company, the prestigious management consulting firm. He was assigned to Mercedes-Benz, headquartered in Stuttgart, Germany, and then joined the car company outright in 1992 as a project manager responsible for cost-cutting in its assembly plants. Two years later, he was named manager for the new S-Class assembly plant in Sindelfingen, Germany, and then headed the product launch of the revamped S-Class series of luxury sedans, which came on the market in 1998. A rising star at the company and not yet 40 years old, he was promoted to chief executive officer for Mercedes-AMG, the company's high-performance division, in 1999. AMG makes a limited number of cars, all built by hand, either for the racing circuit or for automotive connoisseurs who can afford a top-of-the-line customized vehicle.

Mercedes-Benz merged with one of Detroit's Big Three automakers, the Chrysler Corporation, in the spring of 1998. Executives in both Stuttgart and Auburn Hills—the Detroit suburb where Chrysler's headquarters were located—trumpeted it as a merger of equals, but within a few years it became apparent that Chrysler was bleeding money, and that some major changes were in order. Bernhard was named as deputy member of the Daimler-Chrysler board of management and Chrysler's chief operating officer in November of 2000. He headed to Michigan along with another executive, Dieter Zetsche, to take over at Chrysler at a time when some feared the ailing company was on the verge of bankruptcy and that the decision-makers back in Stuttgart might choose to sell it off in parts.

The arrival of the two Germans to lead one of the Motor City's largest employers caused some ill will, but Bernhard and Zetsche's recovery plan for Chrysler worked, and within three years the company had rebounded impressively. It was a leaner automaker, with six fewer factories and 26,000 fewer jobs, but sales were up and within a few years Chrysler's financial performance had even surpassed that of Mercedes-Benz. Known as the blunt-speaking ax-man in contrast to Zetsche's more genial personality, Bernhard was particularly commended for fighting to save Chrysler's new-product design budget and staff when the company was losing millions of dollars each quarter. He was slated to take over as head of the Mercedes-Benz car group in May of 2004, but his forthright manner reportedly rankled senior executives in Stuttgart during the transition period, and just two days before his official switch, Bernhard was bypassed for the job and subsequently resigned.

Later that year, Bernhard was hired to head the Volkswagen brand group for the Volkswagen (VW) AG automotive group. This company, founded in Germany during the Nazi era, was the world's fourth-largest automaker; its divisions included Audi, Bentley, and Lamborghini, but its VW nameplate had been among the world's best-known line of cars for decades. Beloved by automotive enthusiasts and price-conscious consumers alike, its models were renowned for their reliability and superior German engineering, but the company had faltered in recent years. Costs at its German factories remained among the highest in the auto industry, which were passed along to consumers, and its reputation for quality products took a series of blows in the 1990s.

VW was losing stunning amounts of money every quarter when Bernhard took over fully in the spring of 2005. Zeroing in on the problem, he saw that VW's factories were outdated, and that its showplace assembly line in Wolfsburg, Germany—also the VW AG headquarters—was churning out its top seller, the VW Golf, far below actual plant capacity. After shepherding the company through a difficult period involving board scandals, Bernhard began to put together a blueprint to rescue the VW brand. He unveiled this in June of 2006, speaking before a crowd of Wolfsburg employees, who staff Europe's largest auto assembly plant and are the highest paid workers in their industry in the world. Using charts and diagrams, he showed that the company actually loses money on every Golf it sells. "We want to build the next Golf in Wolfsburg," Independent on Sunday journalist David Brierley quoted him as saying, "but only if the company does not pay for every car sold."

Some in the crowd booed Bernhard, knowing that part of his rescue plan for VW involved raising the work week at the Wolfsburg assembly plant from 28.8 hours per week to 35, with no corresponding increase in pay. Furthermore, German labor laws make it nearly impossible to shut down a factory permanently, but Bernhard voiced his willingness to consider the alternatives: a new Scirocco coupe planned for 2008 launch would be built in Portugal, where labor costs are lower. The company was also planning a mini-SUV called the Marrakesh which would sell at a much lower price than VW's first-ever SUV, the Touareg. "Costs are too high, and this restrains our ability to react in the marketplace," Bernhard said of VW's troubles in an interview with Karen Lowry Miller for Newsweek . "We need to … be a Volkswagen again, which means 'people's car,' for the average guy who does not have a huge amount of money."

Sources

Automotive News , May 3, 2004, p. 1.

Business Week , July 25, 2005, p. 22.

Forbes , March 5, 2001, p. 66.

Independent on Sunday (London, England), June 25, 2006, p. 6.

Motor Trend , March 2006, p. 24.

Newsweek , October 31, 2005, p. 36.



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