Heizmann’s PR crisis: VW China vs. Li Anding

By Wayne Xing

Reproduced from ChinaAutoReview.com

The newly appointed CEO of Volkswagen Group China ran into a major PR crisis last week after veteran automotive journalist Li Anding published on November 28 a blog titled “Volkswagen’s ‘PR gate’ – a memo for Heizmann.” (see Insert)

In his blog on sina.com.cn, Li claimed that Heizmann’s decision to let Peter Thul, communications director of brand and product in Wolfsburg, take over the China PR was a “major failure.”

Li alleged that “the wheels of VW China PR in the past four months have been controlled by Thul and his ‘girlfriend’ — a Shanghai lady who used to work at Audi China but has gone to Germany with him, leaving her husband and child behind….. These two people have acted willfully, making key decisions on the selection of media representatives for interviewing Heizmann, recommendation of the new PR director of Volkswagen Group China, and selection of VW China’s new PR agency.”

Li’s blog created an immediate uproar among local automotive journalists who republished the blog in newspapers and leading automotive internet portals, including xinhuanet.com run by the official Xinhua News Agency where Li had worked all his life before retirement.

The blog came just as VW China’s dispute with consumers about the company’s alleged DSG problems had quieted down when Wolfsburg replaced Karl-Thomas Neumann with Jochem Heizmann as VW China’s CEO and VW China’s communications director Molly Yang was removed from her position.

It came also when Volkswagen and partner FAW had been tangled over the spat of whether FAW had infringed on VW’s engine and transmission technologies (see “Behind VW’s claim of FAW infringement,” p. 1, CAR, December 2012).

The German automaker denied these allegations on November 29, the day when it reached an agreement with FAW to extend the FAW-VW JV beyond the expiration date in 2016. VW declared in a statement to the media that neither of its venture partners had infringed on one another’s rights in the past years.

On that very day at 9:40 am Li received a phone call from Ma Jinghua, a VW China senior PR executive as he was driving to the airport for Shanghai. “VW Group PR director Thul wanted me to tell you that he is very angry in seeing your article published on the internet and in the newspapers. Your allegations are not only false but also an insult to him. He would initiate a law suit,” Li quoted Ma as saying in his weibo, or microblog.

After an intensive exchange of emails, weibo, phone calls, test messages and home visits over the next 48 hours between VW and Li, VW China PR department released the following official weibo on December 1: “Contrary to internet hearsays, VW Group China hereby formally announces that it would not initiate legal proceedings against Mr. Li Anding. Thanks for your support and interest.”

On the same day Li received a text message from Thul via Ma Jinghua, which reads according to Li’s weibo: “I do not have plans now to use any legal means or initiate a law suit against Mr. Li Anding. I am willing to have a constructive meeting and discussion with Mr. Li.”

While it is debatable as to the appropriateness of Li Anding’s blog in terms of journalistic practice and VW’s responses, the Li vs. VW encounter indicates that multinational automakers operating in China can hardly ignore the different kind of media and PR environment and relationships. They are also constrained in what they can do with their state-owned partners that are owned by the government.

Li wrote in his blog that “any move that overlooks the sentiments of Chinese consumers and its partners in China could be catastrophic for Volkswagen.”

INSERT

Volkswagen’s “PR Gate” — a memo for Heizmann

By Li Anding

Even without in-depth communication, I intuitively feel the integrity, dedication and down-to-earth style of Professor Jochem Heizmann, the new chairman of Volkswagen Group China. During the two months before he officially took office, he visited almost all of Volkswagen’s joint venture and wholly-owned enterprises in China and did extensive investigations.

However, having Wolfsburg take over complete control of Volkswagen Group China’s PR is a major failure in his recent scorecard. The imbecility, arrogance and possible pursuit of personal interest of the executor of VW’s PR have sunk the image of Volkswagen Group China to a new low. The latest example is that at the recent Auto Guangzhou 2012, most of the senior journalists in China that had participated in the previous “Volkswagen Night” events refused.

Heizmann started his China career with a strong hand unlike the hesitant and indecisive predecessor Dr. Karl-Thomas Neumann. But Heizmann has gone a little astray by depending too much on Wolfsburg. This may seem normal because Heizmann is both a board member of Volkswagen Group in Wolfsburg and CEO for China. It is therefore not surprising to see that Volkswagen China’s PR has been given to communications director Peter Thul in Wolfsburg who is in charge of branding and product technology.

I don’t want to attempt to comment on Mr. Thul’s professional capability. But the wheels of Volkswagen Group China’s PR in the past four months have been controlled by Thul and his “girlfriend” — a Shanghai lady who used to work at Audi China but has gone to Germany with him, leaving her husband and children behind. Among automtove circles the lady is widely known for her ignorance of the automobiles but obsession with fashionable brands. These two people have acted willfully, making key decisions on the selection of media representatives for interviewing Jochem Heizmann, recommendation of the new PR director of Volkswagen Group China, and selection of VW China’s new PR company. The two ladies at VW China in charge of corporate image and products have no alternative but following orders of Thul and his girlfriend to exclude a senior journalist who not only speaks German from getting close to Heizman. The journalist knows very well the background Thul and his girlfriend.

Ever since the early 1980s when I personally witnessed the founding of Shanghai-Volkswagen, I have interviewed Hahn, Piech, Bernd Pischetsrieder and Winterkorn and written about the progress, success and setbacks of Volkswagen Group in China and the world. I truly appreciate Volkswagen’s concept of automobile manufacturing. But at the same time I have seen an unavoidable pattern for Volkswagen China: once Volkswagen gets into an aggressive and belligerent mood in China, it would be close to meeting its Waterloo.

The China market has become the most important card for Volkswagen to seek domination of the world market. In Volkswagen’s two JVs, FAW takes up 60 percent and SAIC 50 percent equity shares. Nothing is small in PR relations. Any move that overlooks sentiments of Chinese consumers and its partners in China could be catastrophic for Volkswagen.

I guess Professor Heizmann may still be kept in the dark. Here I would like to give him some kind of a reminder: it is inconceivable that the complete chain of PR interests of a multinational like Volkswagen is in the hands of a “de facto husband and wife.” The potential of corruption is worth looking into by Volkswagen’s audit department. There should at least be a mechanism to prevent from personal conflict of interests. Volkswagen should avoid having to deal with an international scandal that may be exposed by the media.

(Translated by International Business)