Michael Horn Out at Volkswagen

Michael Horn Out at Volkswagen

March 10, 2016 — The blows keep coming for Volkswagen dealers in the U.S., who lost a key ally yesterday with executive Michael Horn’s sudden departure. According to a statement from Volkswagen, Horn, who had been CEO Volkswagen Group of America for nearly two years, is leaving the company immediately to pursue other interests. His exit is based on mutual agreement the automaker said.

Hinrich Woebcken, who is set to assume the top job for the automaker’s North American region in April, will take over Horn’s position on an interim basis.

Horn reportedly was to be ousted six months ago following the revelation that Volkswagen had cheated on emissions tests with more than 500,000 diesel vehicles. Dealers, though, rallied to his defense convincing the automaker’s German executives to keep him. Horn worked hard to strengthen Volkswagen’s relationships with its dealers over the last couple of years which led to their support of him. He was able to secure modest financial support for dealers early during the crisis, but it was not nearly enough, dealers tell TBR.

There is no word on why Horn, who had been with the automaker for 25 years, is leaving at this time. There may be more changes on the way, though, as German prosecutors announced this week it now is investigating 17 people — up from six originally — as part of the scandal. None of the 17 are part of Volkswagen’s management board, however.

Yesterday’s announcement came as a surprise to the industry, including to Volkswagen dealers. Several dealers are concerned the change in leadership in the U.S. will negatively affect the automaker’s negotiations with regulators over how to fix the emissions problem for 600,000 vehicles here. But the truth is, Horn’s departure likely won’t affect the negotiations much as it’s unclear how much influence he had in the discussions.

It’s been six months since news of the scandal broke, but Volkswagen has yet to submit a recall plan that satisfies U.S. authorities. The automaker has to present another plan to California and U.S regulators by March 24 for the affected 2.0 liter diesel engines. In January, authorities rejected an earlier plan submitted by Volkswagen in December. Regulators currently are evaluating a separate plan for nearly 80,000 vehicles with 3.0 liter diesel engines.

Dealers, though, are left without a key ally to fight for their interests here in the U.S. And that is a big problem. A statement yesterday from Volkswagen’s national dealer council said the change “can only serve to put the company more at risk, not less.”

Dealers are getting hammered with sales that are down more than 14% this year, despite aggressive incentives and a market running at a record pace. And there is no let up in sight. U.S. dealers have invested billions of dollars in facilities the last few years based on promises from the German automaker that it would hit 800,000 sales by 2018. But those plans are in tatters as sales didn’t even hit 350,000 last year.

For more on Volkswagen’s challenges:

Rough Week for Volkswagen CEO

Volkswagen Fines Far More Than $18 Billion

Volkswagen – Questions, but Few Answers

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