The big interview: Arno Bohn
The former CEO of Porsche gives a rare interview about his time at Zuffenhausen
An outsider who came from the computer industry, Bohn arrived at a company seared by falling sales and riven by internal division about future direction. He left a Porsche which, though still weak, had the 993 in the wings and had conceived the 986/996 platform, a strategy which would be the beginning of its salvation…
The 1980s was a tumultuous decade for Porsche. It began with the cyclical ten-year slump which had briefly affected the company both in the early 1960s and 1970s, but then led to several years of unprecedented growth and prosperity. Under CEO Peter Schutz sales quadrupled over five years, thanks largely to the steady appreciation of the US dollar. Much of the profit was ploughed into expanding R&D at Weissach where a wind tunnel, a dedicated crash test centre and 35 new engine test rigs were constructed. More and more of Weissach’s work came from external contracts, but nevertheless in parallel Porsche developed its technical showpiece, the 959, and designed the successful F1 engine which in a Mclaren chassis won several world championships.
Times were good; undoubtedly less attention was paid to developing the 911 than would have been had the market been harder. And it would become harder: soaring from DM 1.8 in 1980 to DM 3.00 at one point in 1985, the dollar began an inexorable fall which would see it reach DM 1.60 by 1992. All auto manufacturers were affected to some degree, but as a far smaller operator heavily dependent on the US market, Porsche was hit especially hard. Peter Schutz asked to be released from his contract at the end of 1987, commenting ruefully in the face of collapsing profits that there was no ‘Plan B’. Schutz was replaced by Porsche’s long-serving financial director, company loyalist Heinz Branitzki.
If Branitzki, best remembered for the press conference in which he presented the 964 as “the 911 for the next 25 years”, had any notions that he was more than a provisional leader, Porsche’s board of directors had other ideas – it was soon searching for a new manager. When the newly formed Porsche AG appointed Ernst Fuhrmann in 1972 as its first managing director, it was Ferdinand Piëch who made the initial contact. Once again it was Piëch, Porsche shareholder and board member and now chief of VW, who initiated the dialogue with Arno Bohn. The parallel continues, for just as Fuhrmann had quit Goetze, for which he had worked for 15 years, Bohn had recently resigned as deputy chairman of the board of Nixdorf Computer, where he had begun his career two decades earlier.
“In fact I already knew Ferdinand Piëch slightly,” recalls Bohn today. “We had met at a Davos forum and I approached him because we wanted to call a new Nixdorf product a Quattro, which in the early 1980s was rather a good name. Piëch had no objection because there was no conflict with automobiles. After I left Nixdorf at the end of 1988, I went to study at Harvard. While I was in America, one afternoon the following summer I met
Michael Piëch and Wolfgang Porsche in New York. I remember, it was in the Sussex Hotel. I indicated that I was interested in coming to Porsche, and subsequently it was Walther Zügel [a long serving member of Porsche’s advisory board] who acted as go-between.”
Bohn was invited to the family home at Schüttgut in Austria where he says he received “the full Zell am See treatment” and joined
Porsche at Zuffenhausen in November 1989. Branitzki, recalls Bohn, was very cooperative in handing over the responsibilities of the job. He was officially appointed to Porsche’s board on 1 January the following year.
“The macro event for Porsche during my time was the continuing fall of the dollar,” reflects
Bohn. “The Gulf War slowed economies too, and the market for luxury cars collapsed. Even Daimler Benz and BMW made losses in 1990, which was unheard of.”
For Porsche the situation was made worse by its aging model range. The 964, which until 1991 lacked a halo Turbo version, was selling slower than hoped, while the next 911 had not entered development so would not arrive before 1993 at
the earliest. Meanwhile the front-engined 944S desperately needed a facelift, which was still 18 months away. This facelift, the 968 as it was marketed, “was clearly a filler,” says Bohn. “I drove a pre-production Turbo: it was a great car, but I acknowledge that the 968 was too expensive [£35,000 in the UK] for a four-cylinder car.” This was unfortunate. The 968 could have been a ‘six’, and as such sold better. Weissach had designed a compact six-cylinder unit for Volvo. This had smaller overall dimensions than the 944’s ‘four’, but the project was a victim of an early round of budget reductions; the same fate later befell a Bmw-based ‘six’ with a Weissachdeveloped manifold.
“We were casting about for a smaller, lower cost Porsche,” Bohn admits, “because the 924944 range needed a successor in the volume class, a new 912 if you like. The problem is you can upsize a model profitably, but it is very difficult to downsize and still make a profit. Logistics came into it too: the four-cylinder cars were built at Neckarsulm and not integrated at all with 911 production at Zuffenhausen. Overcoming these conflicting factors was what gave rise to the idea to build two cars [the 986 and 996] from a shared platform.”
In mid-1991 Wendelin Wiedeking returned to Porsche as board member for production. He had long bewailed the inefficiencies of Porsche’s inventories and production, but at that time he was not involved, asserts Bohn, in the joint platform concept: “That was Horst Marchart. Wiedeking’s responsibility then was how the new cars were to be manufactured.” Marchart at that time was head of Customer Development. Later in 1991 Bohn would promote Marchart to board member for engineering and development to replace Ulrich Bez, who resigned over the 989.
The 989, the four-door Porsche, was perhaps the most difficult question facing Bohn during his tenure at Zuffenhausen, as he explains: “It was always Ferry’s dream to build a four-door Porsche, but he never made an issue of it. It was a great concept for the engineers to get their teeth into, and I drove one of the 989 prototypes many miles and I admit I fell in love with it. I really thought it was a big step into the future. The four-door would have to retail around DM 72,000, which meant manufacture costs no higher then DM 40,000… quite a challenge. Initially it seemed the engineers could manage this, so DM 72,000 looked quite feasible. Then it started getting out of hand: Weissach could no longer hold on to its original estimate of DM 38,000 to make the 989. It kept going up, and it led to a difficult situation with Bez.
He was very good technically, but in the end he was not managing his team. Part of the 989 story is one of lack of loyalty. I believe that if all his people had been on his side, they would not have kept finding cost increases – Bez didn’t have the support of his team. That’s why he had to leave, because of the cost disaster that the
989 was becoming. I replaced him with Marchart, and even then I had to fight hard to get the board to accept that appointment. Bez was rather like Piëch: technology was paramount and cost was secondary. The Z1 – developed by Bez when he was at BMW Technic – was clearly not a profit monster for BMW.”
Bohn’s difficulties were exacerbated by the animosities between individuals, which often came to the fore in adversity. Bez was continually at loggerheads with Rudi Noppen, production chief. Bez, who had some experience of manufacture, complained that Noppen was out of touch. Bohn sides with his former engineering director here: “Noppen had a silo mentality. He wasn’t a team player and would never fit in a management structure today.” It was probably a relief for all parties when Noppen left to join roof specialist Webasto.
Motorsport, always a key element at Porsche, was another troublesome affair for Arno Bohn. When Bez had joined Porsche in October 1988 he inherited a racing programme in the US: Porsche had built a car for the CART series. The current model had a Porsche engine in a March chassis, and progress in terms of podium finishes was slow. Too slow for Bez, who closed the operation down in September 1989 to concentrate Porsche’s limited competition budget on Formula 1, which he believed had a greater worldwide impact.
But the success which Porsche had enjoyed previously with Mclaren was not to be repeated. Despite its association with the Arrows team, a reliable, competitive car did not emerge. Bez, whose project this was, took most of the blame, but Bohn, who had largely supported him in this venture, incurred the opprobrium of the board for allowing expenditure to go as far as it did.
Bohn recalls the CART series: “It was good exposure for us and Porsche’s composite sandwich chassis was superb – stiff, not heavy and not expensive, but the CART authorities rejected it because American competitors had complained. We couldn’t re-engineer the chassis in aluminium and make the car competitive, and the subsequent tie-up with March to use their chassis added complications. Bez had pulled out before I joined, but it was the right decision. Similarly, I backed his F1 venture.”
In October 1991 the board vetoed that too, and Porsche officially withdrew from F1. Manfred Jantke, who had served as Porsche’s PR manager from 1975 until resigning in 1990, frustrated by Bohn’s interventions in what he considered his
own PR domain, remained embittered for some time after this. He told Karl Ludvigsen that to withdraw from CART was bad enough, but then for Porsche, synonymous with racing success, to quit F1 within a couple of years caused Porsche enormous hurt and loss of face. “Between them,” he told the author of Excellence was Expected, “Bohn and Bez managed to destroy in three years 40 years of Porsche racing success.” In the climate of the time, Ludvigsen was inclined to agree. “An apt summing up,” he called it. Hindsight does tend to change perspective though. 20 years on, Porsche’s Le Mans reputation is as strong as ever, and the interest in historic racing means what people recall today are the successful 917 or the 956/62 racers. CART and Formula 1 have become footnotes.
Arno Bohn claims he has never read ‘Excellence’ or ever spoken to Ludwigsen, but the author of Excellence maintains that he was invited to Stuttgart in autumn 1990 to meet both Bohn and finance director Walter Gnauert who sought to deny press rumours that Porsche could be taken over. For his part Arno Bohn says he was unaware of Jantke’s criticism and observes that his former PR manager was a true Porsche man, but a conservative, a traditionalist who looked back rather than forward. On the other hand a criticism he would make of himself is that he underestimated how long development projects took: “When I came to Porsche I was used to computer industry development cycles of nine months, and I should have known that in the auto industry they would be far longer. One thing that struck me when I first visited Weissach was that more and more external contracts were being undertaken, as if Porsche was more interested in third-party work rather than its own production. Yet no specific successor to the 964 was planned, and the only projects were the 5.4-litre 928 and the 968. Branitzki blamed Helmuth Bott [engineering director who had resigned in September 1988] for development losses and cost over-runs, especially on the 959.”
Over-expenditure at Weissach was no doubt also partly responsible for the cancellation of the Porsche 984, a Porsche smaller than the 911 and designed to replace the 924. Bohn asserts that when he left the 993 was underway and the 986/996 were planned for 1996. What did irk him was the seeming reluctance of the board to renew his contract in February 1992. Ludvigsen reports that the board renewed Bohn’s contract only when Wolfgang Reitzle, BMW’S engineering director who had been offered the post, turned it down. The board, concerned that a leaderless Porsche might be prey to a takeover, then reappointed Bohn in the absence of other candidates. Although this eventual renewal was for five years, the episode undermined the Freiburg man’s confidence in Porsche. The company would surely bounce back, but could he survive that long? Did he even want to? He began to look around. After the business of his contract and the departure of Bez, he was in the direct line of fire. Unlike Helmuth Bott, a 36-year company man who finally resigned, desperate and exhausted, Bohn was an outsider. He was only
45, and there were other opportunities. He was approached by Jack Welch of General Electric to run GE’S medical business in Paris, a position he gladly accepted and occupied for seven years.
He holds no hard feelings; in fact, he had to think quite hard to remember some of the events discussed above, not the usual reaction of someone who has ruminated on a subject for many years. “I enjoyed my time at Porsche,” he reflects. “My cousin was a Porsche salesman in Freiburg and he persuaded my father to buy a 356, so my first ride dates from when I was about ten. Nixdorf sent me to Vienna and I bought a yellow 2.4 E in 1974 and I did 75,000km in it commuting home to Freiburg. I used to make a stop at Zuffenhausen on the way to get the car serviced, so I got to know Porsche then. I liked the polite, cooperative attitude towards customers at Porsche – I took that idea to Nixdorf. I was also struck by the quality of people and loyalty, the way people were married to Porsche and how they would fight for it. With Ferry, you could always walk into his office. I felt we had a decent rapport; Butzi was a nice guy, possibly too nice. I thought he couldn’t keep up in his role as chairman. Really these are great memories – they are what I took with me.”
Arno Bohn’s assistant at Porsche, Tilman Brodbeck, who also worked for both Bohn’s predecessors and his successor Wiedeking, describes Bohn as “a totally honest and generous guy. He couldn’t believe the salary Porsche was offering him. From his background he wasn’t a car man, but he was a man who could listen.
Ulrich Bez once remarked that his former boss “didn’t get it”, but perhaps, in fact, he did. Unlike Bott, Bohn did not leave it too late, and neither has he looked back. Today he’s a fit and energetic 70-year-old, an age Bott sadly never reached, and he has run a successful consultancy company for many years. Rather appropriately, he drives away from our meeting near Schloss Solitude in a Panamera GTS, the much admired modern successor to the brave but flawed 989 of his tenure.
“With Ferry, you could always walk into his office. I felt we had a decent rapport”