Breaking News

Tweet TWEET

VW's Talks with Jacoby Said to Focus on Obligations Before He Joins Volvo

Volkswagen AG is negotiating with U.S. chief Stefan Jacoby over terms of his departure before he takes over as chief executive officer at Volvo Cars, according to people familiar with the matter.

Jacoby, 52, will replace Stephen Odell, 55, at Volvo Cars, said two people with direct knowledge of the matter, who asked not to be identified because the matter is confidential. Jacoby’s talks with VW focus on his contractual obligations to the German carmaker before he leaves, one of the people said.

Jacoby has been Volkswagen’s top U.S. executive since September 2007. He has cut costs, designed the first models for the U.S. market, added an assembly plant in Tennessee and moved the headquarters to Virginia from Michigan. His leaving could result in a drain of production know-how to Volvo, the Swedish automaker Zhejiang Geely Holding Co. is taking over from Ford Motor Co., said Aleksej Wunrau, an analyst at ING BHF-Bank AG in Frankfurt.

“Jacoby’s departure would be bad news for VW” and may cause frictions within VW’s U.S. operations at a time when the Chattanooga plant is about to be opened, Wunrau said.

Michael Lohscheller, who has been in charge of finance in the U.S. since 2007, will run Volkswagen Group of America on an interim basis, while Mark Barnes will do the same for the Volkswagen brand until Jacoby’s “contractual situation has been clarified,” VW said in a statement late yesterday.

Photographer: JB Reed/Bloomberg

Stefan Jacoby, president and chief executive officer of Volkswagen of America, in New York. Close

Stefan Jacoby, president and chief executive officer of Volkswagen of America, in New York.

Close
Open
Photographer: JB Reed/Bloomberg

Stefan Jacoby, president and chief executive officer of Volkswagen of America, in New York.

‘Holding Talks’

“We are holding contract talks with Stefan Jacoby,” Volkswagen said in the statement. “These talks have by no means been concluded yet.”

Volvo Cars’ new management team is up to Geely to confirm, said John Gardiner, a spokesman for Ford of Europe. Yuan Xiaolin, a spokesman for Geely in China, didn’t answer calls to his mobile phone. Per-Ake Froberg, a Volvo spokesman, didn’t have a comment.

Volkswagen’s preferred shares fell 2.16 euros, or 2.8 percent, to close at 75.05 euros in Frankfurt, paring their gains this year to 15 percent and valuing the carmaker at 33.7 billion euros ($41.6 billion).

Geely is buying Volvo from Ford for $1.8 billion in the biggest overseas purchase by a Chinese automaker. Volvo’s leader will have to stanch plummeting sales to return the company to profit while tapping growth in China, which surpassed the U.S. as the world’s largest auto market in 2009.

Challenging BMW

Volvo sold 334,808 cars worldwide last year, a decline of 11 percent from 2008 and 27 percent from a peak of about 460,000 in 2007, according to the company.

Volkswagen aims to sell 1 million cars and sport-utility vehicles in the U.S. by 2018, with its Audi luxury division accounting for 20 percent of that figure. VW is aiming to dethrone Bayerische Motoren Werke AG as the largest luxury automaker.

VW sold about 214,000 cars in the U.S. in 2009, excluding Audi. The company aims to more than double the figure to 450,000 by 2012 to 2013, Jacoby said in January.

The assembly plant in Chattanooga, Tennessee, will begin production next year of a sedan model aimed at U.S. consumers that is bigger than other VW cars, Jacoby said March 31.

Jacoby started working for Volkswagen in 1985 in the industrial sales controlling department, according to his company biography. He worked for Volkswagen of America in 1988 in the controlling and marketing departments, before moving to Japan where he stayed until the end of 1992.

From 1997 to 2001 he was responsible for VW’s Asia-Pacific region. Jacoby left Volkswagen in 2001 to work for Mitsubishi Motors Corp.’s European operations. He returned to VW in March 2004 and became Volkswagen’s global sales chief later that year.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.