Saturday, August 13, 2005

Bernhard Sets the Records Straight

Text from Reuters.
FRANKFURT (Reuters) - Volkswagen Brand Group chief Wolfgang Bernhard has no plans to leave the company and return to rival DaimlerChrysler, Bernhard said in an e-mail to staff at Europe's largest carmaker.

In the e-mail, a copy of which was obtained by Reuters, Bernhard scotched talk that he would return to DaimlerChrysler to take over the luxury Mercedes division.

"All the rumours you have heard and read about me are untrue," Bernhard said in the e-mail, written late Friday.

"I made a promise when I came to Wolfsburg (Volkswagen's Headquarters) six months ago, and I will fulfil this promise. I am staying at Volkswagen."

Volkswagen, and DaimlerChrysler, had previously refused to comment on German media reports Bernhard would take control of Mercedes next year, only a year after joining Volkswagen.

Mercedes is on the lookout for a new head because current chief Eckhard Cordes announced he would quit after losing out in a power struggle to replace outgoing CEO Juergen Schrempp.

German news magazine Spiegel said DaimlerChrysler works council chief Erich Klemm had also dismissed rumours Bernhard would head Mercedes.

In an advance copy of its next edition, released on Saturday, Spiegel, citing confidential information, said new DaimlerChrysler chief executive Dieter Zetsche would instead take provisional responsibility for the unit from September.

Bernhard served as Zetsche's deputy at Chrysler in Detroit and was due to assume responsibility for Mercedes in May 2004, only to be blocked at the last second, in part due to considerable opposition from the group's German works council.

He joined Volkswagen in February and is charged with galvanising the company's flagship brands, including the VW, Bentley, Skoda and Bugatti marques.

Operating profits at the VW Brand Group climbed to 222 million euros in the second quarter but its first-half operating profit of 169 million included a 39 million euro loss at the flagship VW brand.

In the e-mail, Bernhard said the group had made some headway in the last months but he was not considering leaving while there was still so much to do.

"I have made no secret of the fact that the next three years are going to be difficult for Volkswagen," he said. "It is clear to me that changing horses in midstream is a clear way of losing the race."

Spiegel said the most likely candidates for eventual control of Mercedes were the group's research and development head Thomas Weber or General Motors Europe president Carl-Peter Forster.

Mercedes was a cash cow for the company but recently it has grappled with the strong euro, model changes, spending to fix quality problems and hefty losses at the Smart minicar brand.

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