Carl Horst Hahn (born 1 July 1926) is a German businessman and former head of the Volkswagen Group from 1982 to 1993. He served as the chairman of the board of management of the parent company, Volkswagen AG (formerly Volkswagenwerk AG). During his tenure, the group's car production increased from two million units in 1982 to 3.5 million a decade later.
Early life and education
Hahn was born in the German state of Saxony and raised near Chemnitz. His father had been a senior manager of the German car and motorcycle company DKW and was a co-founder of the Auto Union in 1932, which later evolved into the Audi car brand. As a college student, he studied business administration at the University of Cologne and the University of Zurich, economics and politics in Great Britain and France. In 1952, Hahn received his doctorate in Economics at the University of Berne in Switzerland. He went to Perugia for a year to study art history, intending to volunteer at Fiat.
Before joining Volkswagen, he worked as an economist at the OECD in Paris in the der European Productivity Agency. In 1953 Hahn joined VW as an assistant of chairman Heinrich Nordhoff, and quickly became head of sales promotion in VW's export department. Hahn was a favorite of Nordhoff's.
Volkswagen of America, 1959–1965
In 1959, Nordhoff made him president of the company's U.S. subsidiary, Volkswagen of America.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 Marisa Lea Traina (whose brother later married romance novelist Danielle Steel); their four children were all born in the U.S.
Chairman of Volkswagen AG,1982–1993
In 1973, Hahn left VW and returned to Hannover, Germany to lead the German tire company Continental AG. In 1982, he returned to become chairman of Volkswagenwerk AG. Under his leadership, Volkswagen entered a cooperation agreement with the Spanish car brand SEAT in 1982, bought a majority interest in 1986, and by 1990 owned the entire company. In 1985, 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 Volkswagen vehicles sold in 1985 were Golfs, and 97,128 second-generation Golfs were produced at Volkswagen's Volkswagen Westmoreland Assembly Plant in Pennsylvania that year.
Despite 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 75,873 in 1992, largely to due intense competition from American and Japanese carmakers. Soon after Hahn became chairman of VW, he tested an American Volkswagen Rabbit built at the Westmoreland plant, which had opened in 1978, and he was deeply disappointed in how the Rabbit had been changed. The car had been re-engineered to drive like an American family sedan, with softer suspension and shock absorbers. "When I drove the American Rabbit, it felt like a Chevrolet," he complained. "If you want a Chevrolet, you should go to General Motors." 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 brought in new management 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.
After the fall of the Iron Curtain in 1991 Volkswagen entered 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. Hahn also cleaned up VW's business practices, dealing with a case of foreign exchange fraud, but its $300 million cost to Volkswagen ate into the very profits Hahn had helped the company make.
Although Hahn was applauded for making the Volkswagen Golf 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. Hahn could not keep manufacturing and development costs under control. He was replaced as Volkswagen CEO by Ferdinand Piëch in 1993.
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."