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Volkswagen of America, Inc. Announces New Strategic Direction, Move to Virginia and Restructure of U.S. Operations

THU Sep 6, 07, 10:00 AM

AUBURN HILLS, Mich., Sept. 6 /PRNewswire/ -- Volkswagen of America,
Inc. today announced that as part of its new strategic direction, the
Company will relocate its U.S. corporate headquarters to Virginia and also
streamline and restructure its U.S. operations. The new business strategy
will bring Volkswagen of America, with its brands, Volkswagen and Audi,
closer to customers, increase competitiveness, and achieve sharper focus on
key markets.
Volkswagen of America, which is a wholly owned subsidiary of Volkswagen
AG, the world's fourth largest automaker, will begin the transition from
its current location in Auburn Hills, Michigan to Herndon, Virginia in
April 2008. The new 185,000-square-foot facility is expected to be fully
occupied by the end of 2008, and it will house the U.S. headquarters for
Volkswagen of America, Inc. It will also include the U.S. headquarters for
Audi of America, Inc., Audi Financial Services, Volkswagen Credit and other
affiliated operations.
The Company's total workforce at its current headquarters is roughly
1,400. Of these, 800 are full-time employees and 600 are contractors or
employees of service providers assigned to the Company. As a result of the
relocation and realignment:
-- Approximately 400 positions will be transferred to Northern Virginia
(new headquarters)
-- Positions at the new headquarters will be filled with employees who
relocate, and new hires
-- 300 full-time positions and 300 contractors or service providers will
remain in Oakland County (current headquarters)
-- Approximately 400 positions will be eliminated
"With these changes, Volkswagen of America drives the future," said
Stefan Jacoby, incoming President and CEO of Volkswagen of America. "It
reflects a major new commitment to achieving our Company's goals in the
world's largest car market. We are excited about moving our headquarters to
Northern Virginia, where we will be closer to key markets and customers."
Dr. Martin Winterkorn, Chairman of the Board of Management of
Volkswagen AG, added, "We are strongly focused on the U.S. market. This is
a top priority for our Company, and we are confident that under Stefan's
leadership, we will continue to serve our current U.S. customers well and
add many new customers."
"Our excitement is tempered by the fact that we need to reduce our
workforce overall and by the realization that this does not come as good
news in Michigan. However, we will remain a member of the Auburn Hills
community, where we will continue to house certain key business activities
and retain a workforce of approximately 600 people," said Jacoby. "These
changes are necessary to allow Volkswagen of America to meet the needs of
our customers and remain competitive in the U.S. market. We must undertake
an aggressive new direction in this market and these are critical first
steps."
Relocation
Volkswagen of America will add approximately 400 jobs to the Northern
Virginia region.
"Volkswagen's decision for Virginia is a strong affirmation of the
Commonwealth's business-friendly environment, location, market access and
infrastructure," said Governor Timothy Kaine. "The caliber of companies
already located in the region and the proximity to Dulles International
Airport were huge factors in the company's decision."
Volkswagen of America received an attractive, comprehensive incentive
program for the relocation that includes $6 million in cash-grants from
Governor Kaine's office.
Restructuring
Volkswagen of America has already taken steps to reduce its workforce
through attrition, early retirement offers, and voluntary separations.
Further reductions will occur as a result of organizational realignment
associated with the move. Additionally, approximately 600 employees and
contractors will stay in Oakland County, Michigan, to support a variety of
functions, including important financial and technical operations.
"We need fewer redundancies, less bureaucracy, more creativity, and
more openness. Moving and streamlining our operations give us an
opportunity to naturally transform the business so we can compete
successfully in the U.S. market and better serve our customers," added
Jacoby. "We want to connect with our customers better, and these changes
will help us do that."
Strategic Direction
Jacoby was named Volkswagen of America President and CEO in June of
this year, and takes up his responsibilities this month. His extensive
experience with Volkswagen AG in global markets includes a prior assignment
in the United States, as well as senior positions in the Controlling, and
Sales and Marketing areas for Volkswagen. He was head of Controlling in
Japan in the early 1990s, and had responsibility for the Asia-Pacific
Region in the late '90s, where he was instrumental in bringing about the
further expansion of two Volkswagen joint ventures in China. Most recently,
Jacoby was executive vice president of the Volkswagen Group, responsible
for sales and markets worldwide. Jacoby will reside in the United States
and work from the Company's new headquarters in Herndon.
Jacoby said he will implement a new strategy that includes five
pillars: product, brand positioning, dealer network, organization and,
ultimately, the possibility of local production. A premium will be put on
connecting more with customers, and fostering a culture of fresh ideas and
bold thinking. Additionally, the Company will focus efforts on producing
more cars designed specifically with the U.S. market in mind.
"This move and new corporate strategy will benefit our employees, our
dealers, and our customers. Market conditions and business strategy 30
years ago dictated we move to Michigan; today they dictate we move to
Virginia," said Jacoby. "With this move and with our new corporate
strategy, Volkswagen of America drives the future."
About Volkswagen of America, Inc.
Founded in 1955, Volkswagen of America, Inc. is headquartered in Auburn
Hills, Michigan. It is a subsidiary of Volkswagen AG, headquartered in
Wolfsburg, Germany. Volkswagen is one of the world's largest producers of
passenger cars and Europe's largest automaker. Volkswagen sells the Rabbit,
New Beetle, New Beetle convertible, GTI, Jetta, GLI, Passat, Passat wagon,
Eos, and Touareg through approximately 600 independent U.S. dealers. Visit
Volkswagen of America online at vw.com.
About Audi of America
Audi of America, Inc. offers a line of luxury vehicles that include the
Audi A3 sport compact; the sporty A4 sedan, Avant and Cabriolet models; the
high performance S4 sedan, Avant and Cabriolet models; the high-revving RS
4 sports sedan and Cabriolet (November 2007 launch); the all-new S5 coupe
(November 2007 launch) with 354 hp; the design-leading A6 sedan and Avant;
the V10-powered high performance S6 sedan; the Audi Q7 performance SUV; the
new all-aluminum Audi A8 and A8L; the new S8 with V10 power; the all-new
2008 TT Coupe and Roadster models; and the all-new all-aluminum R8, one of
the most exclusive mid-engine sports cars in the world. Information
regarding the Audi brand and products can be found at
http://www.audiusa.com.
CONTACT: Steve Keyes
(248) 754-4391
Steve.Keyes@vw.com



SOURCE Volkswagen of America, Inc.