VW has confirmed the long running speculation that it will move its US headquarters to Virginia from Michigan and eliminate 400 jobs.
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The move follows four consecutive years of losses for Volkswagen in the US.
The company plans to cut 400 positions, move 400 people to a new headquarters outside Washington in Herndon, Virginia, and keep 600 people in Auburn Hills.
The new 185,000-square-foot facility is expected to be fully occupied by the end of 2008, and it will house the US 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 600 people remaining in Auburn Hills will run a call center as well as a facility that does final preparations on vehicles for the US market before they are sent to dealerships
Bloomberg notes that Volkswagen has replaced the top three North American executives in the last three years, most recently naming Stefan Jacoby to take over US operations starting this month as the company struggles to end North American losses.
The Wolfsburg, Germany-based carmaker last made a profit in the US in 2002 and lost EUR607m (USD828m) last year, Bloomberg said.
“Moving the headquarters is a clear way to signal a fresh start, which is something the new head of US operations has signalled that he wants to do,” said Andrew Lobbenberg, an analyst at ABN Amro in London.
“Being in Detroit just ties you to the muddle of the Big Three.”
In an interview with The Washington Post, Volkswagen of America President and CEO Stefan Jacoby said the company decided early in 2006 to move to the East Coast because that is where most of its customers were.
“You want to work in an environment where you see your customers, where you see your cars on the road,” Jacoby said. “You don’t want to work where you basically see only American cars of the Big Three.”
