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An employee polishes a Volkswagen Phaeton in the factory, Glaeserne Manufaktur, in Dresden, eastern Germany, Thursday, Aug. 22, 2002, while the car stands in a tunnel for a paintwork quality check. (MATTHIAS RIETSCHEL/AP Photo)
An employee polishes a Volkswagen Phaeton in the factory, Glaeserne Manufaktur, in Dresden, eastern Germany, Thursday, Aug. 22, 2002, while the car stands in a tunnel for a paintwork quality check. (MATTHIAS RIETSCHEL/AP Photo)

Driving It Home

A valuable lesson: Never pick on the boss's pet project Add to ...

The last time Volkswagen brought the Phaeton to North America, Audi’s top boss in the United States was fired for speaking the truth about a luxury sedan with a VW badge. Current and future Audi bosses you’ve been forewarned: call a flop a flop and you might get canned for your troubles.

The Phaeton-related events of a decade ago come to mind now that the garrulous and quite candid VW Group of America president and CEO Michael Horn has told Bloomberg that while “we definitely don't want to position the brand upwards,” VW does plan to bring the Phaeton back to North America “somewhere in 2018, 2019."

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Really? In the fall of 2004, the eight-month reign of the then-vice president in charge of Audi of America and Canada came to an abrupt end, thanks to what we will call “The Phaeton Affair.”

Axel Mees, who had come to his Audi job after a long stint with BMW, saw his VW Group career crash and burn after suggesting that the VW Phaeton was a grave mistake – planting the blame for the slow-selling luxury VW built in the old East Germany (Dresden) squarely on former VW and Audi CEO Ferdinand Piech. Piech is now chairman of the VW Group.

I was sitting beside Mees at a dinner in San Francisco to mark the launch of the then-new Audi A6 when he told me and the other assembled journos that the Phaeton “could be the best car, but I would still not buy it because it has the VW logo and because I have to go to a VW dealership where the salesmen are used to selling Jettas and Golfs.”

Yes, he said that. And then he turned his attention to the big boss, Piech: “Piech was an engineer and he wanted to prove that he (could) build great cars, and he didn’t look at the marketing aspect, the brand aspect.”

Mees was immediately sacked. Audi officially called the sacking a leadership change triggered by Audi’s inability to meet growth targets that year. But that was just cover for the real reason: his public criticism of the boss and one of his pet projects, the Phaeton.

Michael Horn and all you other VW and Audi executives, as you ponder re-launching the Phaeton, as you study how to sell a luxury sedan from a showroom still filled with Jettas and Golfs, do recall the phate – uh, fate – of Axel Mees. And don’t forget that Piech still reigns supreme at the VW Group as chairman of the supervisory board.

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