Volkswagen of America Moves To Virginia

Last week I opined in an open letter to Stefan Jacoby, the new president of Volkswagen of America, that the American division of VW should move back to New Jersey, where the cars come in to port, and also because of its proximity to Volkswagen's best regional market. I'm sure someone with access to him told him the same thing behind closed doors, but it's not going to happen. Jacoby announced that Volkswagen of America is moving to Herndon, Virginia, a Washington, D.C. suburb. Jacoby thinks he can be close to more VW customers there, and its proximity to Dulles International Airport, one of the most important airports in the country, will allow more of direct connection to Germany.

An era has ended, and the end was long overdue. Volkswagen ended up in suburban Detroit in the first place by establishing an office for its American manufacturing division when the company opened its factory in Westmoreland County, Pennsylvania; James McLernon, who ran the factory and had previously worked at Chevrolet, wanted to be close to suppliers in Detroit that he had good relations with. Eventually the office in Englewood Cliffs, New Jersey was shut down due to increasing redundancies and confusion between the two offices.

A foreign car company moving to the backyard of the Big Three may sound like the company in question has arrived in America at last, but that wasn't the situation. Volkswagen of America executives were cut from a different cloth from Detroit brass, being more conscious of value for money and precision engineering, while American automakers opted for more bland and pedestrian products. The Pennsylvania-built Volkswagen Rabbit was even softened for "heartland" tastes, showing that McLernon and the associates he brought over from General Motors didn't understand the VW mindset. The car was de-Americanized when the stiffer shocks and suspension that made it a VW were reinstated, but the management adopted the same jive culture that had affected car making in Detroit for years. Although the Pennsylvania plant closed in 1988 (by then making the second-generation Golf and Jetta), Volkswagen of America not only remained in Michigan, it even moved into a posh new office building in Auburn Hills, a sterile suburban town that hadn't even existed when Volkswagen opened its U.S. plant in 1978.

Since switching to building front-engine, watercooled cars, Volkswagen has developed a reputation in America for stumbling, recovering, then stumbling again to repeat the process. Example 1: After being written off in the early eighties for its dated product, Volkswagen introduced the second-generation Golf and Jetta in the fall of 1984 and enjoyed a brief uptick in sales before resuming its downward spiral. Example 2: The New Beetle was a boost to the brand, but its novelty has worn off and current product (other than the GTI) is too uninspiring to move many VW fans. When people who swear by Volkswagen write off the Jetta for looking too much like the Toyota Corolla (before they've even test-driven it), you know VW has an image problem that may be more than just that.

Volkswagen has to recognize that they are a major company and a trusted brand, and they have to re-orient themselves to the increasingly fickle and demanding American market. Plus, they have to deliver more inspiring product that will re-affirm the faith of old Volkswagen customers and bring in new ones. Moving the U.S. offices closer to VW's loyal fan base and getting away from the Motor City isn't going to accomplish all of that alone, but it's a step in the right direction.