A Buggy New Book About VW of America

Introduction (excerpt)

Volkswagen of America has experienced huge success and bitter failure. From just two deliveries in 1949, the brand rose to capture 5% of the auto market in 1970. It then plummeted to less than 1% in 1990. And 1975 saw Volkswagen lose its position as the leading import brand in America to Toyota. The Japanese combination of value for the money and high quality could not be matched by either the Germans or the Big Three. Though Volkswagen was the first import to build a U.S. assembly plant when it began building Rabbits in Pennsylvania in 1978, just a decade later the plant was shuttered. Beset by its own arrogance throughout the 80s, Volkswagen was with an inattentive Mother company in Germany, had currency disadvantages and an unwillingness to recognize the special needs of the U.S. market apart from its home market of Western Europe and the developing markets like Brazil and Eastern Europe. VW reached its nadir in 1993 when it held less than a 0.5% market share. Unable to supply its dealers with product from its Mexican plant that was experiencing severe quality problems, Volkswagen actually paid dealers to stay in business. By 1996, though, sales had trended upward; a decision to bring back the legendary Beetle was made, and fears that VW would leave the U.S. market evaporated. It is a story of how a company blazed a path, lost its way and then found itself again.

It is difficult to pinpoint when the idea for this book first arose. I wrote my first Volkswagen piece in 1989 for a magazine called Adweeks's Marketing Week, later re-named Brandweek. Entitled "Can VW Survive?" it prompted me to think of a book that might be called, "Bugged: The Fall of Volkswagen in America." I was intrigued by a brand that had played such an obvious and amazing role to a generation of Americans. This brand, an icon, had been loved and had stood for something. It had inspired. Volkswagen was a leading player in a cultural revolution in America. It had brand equity that companies spend hundreds of millions to craft and nurture. Disney made the Beetle a movie star! Yet in 1988 the company was caving in. It was on its knees. The U.S. management, all I had access to at the time, seemed extraordinarily patient for a company that had gone from selling over a half million cars in 1970 to less than 200,000 in 1988. I clearly recall asking then Volkswagen of America executive vice president Bill Young about the possibility of bringing the Beetle back to juice things up again. His response: "That's not going to happen, and for a lot of very good reasons." Young, a long-time respected Volkswagen executive, spoke of an out-moded design the company had discontinued for very good reasons. In fact, Young was right. Volkswagen had stopped making the Beetle for very sound business reasons. But the company had made so many mistakes with regard to the American market in the mid-1970s and 1980s that the lack of a Beetle was hardly the biggest problem.

At the time the last Beetle was delivered to a U.S. dealership for sale in 1980, sales of the Bug were less than 5,000. It was not quite the great value it once was compared to the Japanese cars hitting the U.S. at the time. And it certainly did not meet Washington's toughening safety standards. Volkswagen AG in Germany, full of proud and talented designers and engineers, had every reason to believe that the Golf, to be sold in the U.S. as the Rabbit when it was introduced in 1975, would do just fine in maintaining the brand's sales volume and market share. In fact, the company was sure that business would grow. It built a factory in Pennsylvania to crank out cars, and was planning a second in plant in Michigan by 1980.

What it took Volkswagen a decade or so to understand, from 1980 to 1990, was how vital the Beetle was to the Volkswagen brand in America. It was the soul of the brand in America, a fact lost on Germans. They were all too ready to move on to the next big thing. In fact, the company that had done so much to revolutionize advertising through the 1960s and 70s (and not just car advertising) appeared to have lost its brand management skills entirely. It's bland advertising reflected what the public at large had come to view as the bland, pedestrian products. The Rabbit. The Quantum. The Scirocco. The Jetta. They were as successful in Europe as the Beetle had been. But in America, these cars had neither the quality nor the panache that VW lovers had come to cherish in the 1960s and 70s with the Beetle, Karmann Ghia, Microbus and the Squareback wagon. The spotty quality, as contrasted with the Japanese companies' exacting standards, became a bigger issue than Germany was willing to comprehend.

At bottom, though, the company underestimated how critical an ingredient the Beetle was to its recipe for success in America. Other companies, like Honda and Toyota, had scooped up Volkswagen customers with cars that were dependable, fuel- efficient and peppy. A generation of advertising copywriters had gone to school on the work Doyle Dane Bernbach did for Volkswagen, and injected personality into the advertising of Honda, and Subaru, and later Saturn. Japanese quality surpassed Volkswagen's, as well as the American Big Three, by a wide margin. From a personality standpoint, Honda, Subaru and Saturn became the spiritual successors to Volkswagen. They married quality with that essential, quirky lovability.

Rusty Running Boards and Sheepskin Seat Covers. Thanks Mom!

I'm not sure I would have latched on to the Volkswagen story in the way that I did if it were not for a purchase I made in the Spring of 1982, when I took a year off from college half-way through my freshman year to "find myself." I began the journey by buying a 1964 white Volkswagen Beetle from my neighbor. Margaret Wolf, a dear friend of our family, lived across the street and was the widow of a craggy, cigar-chewing German, Karl, who bought the Beetle new and maintained it himself in his driveway. The car cost me $250.00 to drive across the street to my driveway, and this included the "Fix Your Volkswagen," book by Jud Purvis, which still had Karl's oily fingerprints on the pages. Even with 100,000 miles on it, the car seemed like a deal for the price. It would eventually cost me (and my father) another $1,500 in repairs over the next 18 months before it gave up the ghost after too many trips on the New Jersey Turnpike between Westfield, New Jersey and Fordham University in the Bronx where I finished my schooling; many of those miles on re-tread tires. That year of finding myself took me to a frigid dock on the west side of Manhattan where I loaded and unloaded trucks of copier paper, and to the broiling loading bay of Channel Home Center in Springfield, New Jersey where I unloaded trucks of two-by-fours and fiberglass insulation. Those experiences were enough to lead me back to the classroom. My Bug saw me through it all.

After taking posession of my Beetle's keys, I immediately discovered something shared by almost everyone who owns one of the "original" Beetles -- that the car is not so much a mode of transportation, but a medium. A canvas. The car's simplicity, it's light weight and egg-like presence made it more an extension of its owner than any car I have ever driven or even encountered. In no time I had pried the rusting running boards off and replaced them with lacquered oak. I installed green and then brown indoor-outdoor carpeting on the floor filched from Channel Home Center. My dear and tireless mother custom fit imitation sheepskin seat covers. I replaced the AM radio with a Kraco AM/FM cassette player and mounted speakers in the well behind the rear seat on a wooden shelf. It took me all day to discover I couldn't match a 12-volt stereo to a 6-volt battery. It is the only time in my life I ever tinkered with the dashboard in a car. But I did so because the Beetle's rear-mounted engine made access a breeze. In fact, more opportunities for repair on that car seemed within my limited mechanical reach than any other car I've owned. The only time I really crossed the line between ability and ineptitude was when I thought I could paint the car emerald green with a half-dozen cans of spray paint from the parts store. I only got as far as making a mess of the hood before I broke down and repainted it a version of white that was close, but not an exact match, to the rest of the car.

The floor of the Beetle started to sag below my 220 pound frame. The crack that opened every time I got into the car and let water in when it rained. My lack of comprehension of the problem led me to slather Bondo and then roofing cement over the crack. This of course, did little but make a mess of the situation. Fiberglass tape across the crack didn't help either, as my weight just opened the crack every time the car hit a bump. I finally prevailed on a sooty German on the South side of Westfield, Meyerhoff, to weld a piece of steel around the sill of the car to hold the floor in place; this despite he had a sign in his welding shop that plainly said: no auto repairs. Either the car, or I, looked pathetic enough for him to waive his rule.

I have always had a subconscious love for the Beetle, I think, because three of my favorite teachers drove them. Miss Jane Sterling, who taught me in second grade, drove a yellow Cabrio Beetle. She may still be driving it for all I know. Karin Ninesling, my 8th grade English teacher, drove a yellow Beetle in which she gave me many rides to school as she saw me walking on North Avenue in Westfield toward Roosevelt Junior High. The late and beloved Richard Veit, my 7th grade geography teacher, too, drove a Beetle as did many wise, if underpaid, teachers. They were excellent and thoughtful teachers for other reasons than their good taste in cars.

By 1996 and '97, I was glad not to have undertaken the book I envisioned in 1988, because I would look pretty foolish today. Under the leadership of Ferdinand Piech, the grandson of Beetle originator Ferdinand Porsche, and helped by talented people at Volkswagen of America and ad agency Arnold Communications, the company came to its senses and reincarnated the Beetle as The New Beetle.

Volkswagen's recovery has been enormously helped by the New Beetle. But the re-do of the Bug is not the whole story. Yes, the New Beetle has certainly been a rallying point for the company, its followers and dealers. But excellent remakes of the Passat, Golf and Jetta have also driven success. Piech is a product man first and last, and it shows in perhaps the most fun-to-drive vehicles in the industry. We will never know if the stunning recovery of Volkswagen in the U.S., which continues into 2001 when the company expects to sell more than 300,000 vehicles here, would have been possible without the New Beetle. The company well might have recovered anyway, given the brilliant restyling of the other cars. But it seems certain that recovery would not have taken place as quickly, nor would the people responsible have had nearly as much fun.

Volkswagen had already embarked on a car that would become the New Beetle before it fired its longtime ad agency, DDB Needham, and hired Arnold. But the work Arnold did to reposition the Volkswagen brand in advance of the New Beetle's arrival has a great deal to do with the company's turnaround. The brilliant work it did with the launch of the New Beetle -- the classic though still original homage to Volkswagen's world beating advertising of the 1960s and 70s -- deserved the many awards that followed.

One of my first interviews for that initial story on Volkswagen was with John "Jake" Slaven, at that time the former director of advertising for Volkswagen who I had come to know as an executive at ad agency Scali, McCabe Sloves. Slaven, though he had moved on to another car brand, never lost his affection for VW, and continued to consult for the company into the 1990s after his tumultuous agency days were behind him. It was Slaven who fostered my interest in writing a book about the brand. He remarked more than once that the Volkswagen brand would come back, "Because it's so much bigger than the people who come and go at the company and the agency, people who seem to have an infinite capacity for screwing it up." After that first story ran in 1988, Slaven also told me to keep my notes on the subsequent Volkswagen stories I would write, "Because there's a book about this brand to be written." Slaven said from time to time that he might write it, but doubted that he would since he continued to earn part of his living from VW right up to his untimely death in 1999. I thank him for encouraging me to save my notes.

The objective of this book is not to capture all of Volkswagen's complex history in one volume. Reporters and historians have produced some wonderful scholarship on Volkswagen's early years of the 1930's and 40's, as well as it's American growth in the 1950's and 60's. Many of the people those reporters interviewed are now gone, and I would be foolish to try to surpass them.

I hope I have included enough historical information and insight to give readers a sense of Volkswagen's story. My goal is to provide a sketch of Volkswagen's history going back to the 1930s so readers can appreciate the brand's importance throughout most of the 20th century, and chronicle the remarkable comeback of the company in the 1990s, especially in America.

As someone who has worked in the advertising business and seen some of the most inept marketing and advertising ever foisted on the American media landscape, I hope that people trying to figure out how to fix a brand will learn a few things about how to do it, and how not to do it. The story of Volkswagen is a good teacher.

And it's a good story.