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An Interview with Dr. -Ing. Franz-Josef Paefgen, Chairman and Chief Executive, Bentley Motors Limited, Crewe, United Kingdom

The recipient of a doctorate in company still customizes its vehicles to mechanical engineering from Aachen, meet the desires of individual owners. Paefgen began his career in the automo- Bentley Motors is owned by Volkswagen tive industry in 1976 as a graduate AG, which reported sales of $96.13 billion trainee at Ford of Germany. After joining and net profit of $2.86 billion in 2002. Audi in 1980, he was appointed to vari- ous positions of increasing responsibility, Recently, Bentley has experienced a including acting head of research and resurgence that has taken the spot- development (1994); member of the light away from Rolls-Royce. In fact, board of management with responsibility Bentleys are the cars of the moment for technical development (1995); deputy for those who can afford the best. chairman (1997); and ultimately spokes- How did that come to pass? man and chairman of the management Well, I think it has something to do board (1998). When Audi acquired Lam- with the magic of the marque. Bentley, borghini in July 1998, Paefgen was funnily enough, was only completely inde- appointed president of Automobil Lam- pendent of Rolls-Royce for a 12-year borghini Holding. He assumed his pre- period, from 1919 to 1931. However, Dr. -Ing. Franz-Josef Paefgen sent post in March 2002. within that short time the company made a lot of fantastic cars. EDITORS’ NOTE Assessing Bentley Motors’ COMPANY BRIEF Founded in 1919 by Over the next 50 to 70 years, Bentley recent revitalization as the hottest name engineer Walter Owen Bentley, Bentley was essentially hidden under the shadow in the luxury-automobile arena, Chair- Motors Limited is a leading manufac- of the important Rolls-Royce brand name. man and CEO Dr. -Ing. Franz- Josef Paefgen credits both “the magic of the marque” and the company’s cache of “fantastic cars.” For, “at the moment, we’re reviving that feeling from the early days of the ’20s and ’30s, when luxurious and sporty Bent- leys were the stars,” he enthuses. And “at the core of this restructur- ing is the new product,” Paefgen emphasizes, citing the classic yet enhanced Arnage Series II, as well as the all-new Continental GT – an exciting coupe that exudes “all the luxury and crafts- manship you would expect from a Bentley.” And then, of course, there’s the fact that Bentley “bene- fits from the best of both worlds,” leveraging the resources of its parent company, Volkswagen AG, while being “very careful about The Bentley State Limousine, custom-made for the Queen of England and presented at Her Majesty’s golden jubilee celebration preserving the Bentley culture and the marque.” For, as the chairman turer of British sporting cars that are So, at the moment, we’re reviving that and CEO summarizes, “all of these ele- renowned for their stunning perfor- feeling from the early days of the ’20s and ments – the group technology, systems, mance and unparalleled luxury and ’30s, when luxurious and sporty Bentleys and facilities; the culture of the Bentley refinement. Throughout its history, the were the stars. marque; and the incredible skill and Crewe, United Kingdom-based firm has What cars are included in your craft of our people – really come together built thoroughbred cars of unique char- current product line? well to form a unique company.” acter and racing pedigree, and today the Our existing range of cars includes

44 LEADERS POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC. VOLUME 26, NUMBER 2 Ultimately, it has been a lot of hard work. First and foremost, we started by improving the quality of the exist- ing product. So, as I said before, today’s Arnage is a fantastic car in terms of both quality and technology. Our product excellence says something to the public about the capability of the reinvigorated Bent- ley organization. I think our message is being understood, and we’re

Arnage Limousine (above and right) the Arnage R, the standard four-door deal with a company sedan; the Arnage T, a sporty version of that was a major em- the R, with the strongest engine and a ployer in the United sports chassis; and the Arnage RL, a long- Kingdom. Second, at wheel base car, which can be customized the moment, we’re the to include any option you can imagine. In only company world- the future we’ll continue to run these car wide that can make a lines, as well as the new Continental GT, car such as this one, of which we’ll also produce a four-door customized to suit version at the end of 2004. Production of a customer’s special the current Continental and Azure models wishes. The design was will end this summer, and we expect them discussed in great detail with the Queen looking forward to this year’s results in to become collectors’ items in the future. and her husband, and we built the Bentley the fourth quarter once the Continental What exactly is the new Con- State Limousine exactly the way she GT comes out. tinental GT? wanted it. Then, of course, we are investing a The new Continental GT is a sports Is it true that the Queen’s limou- lot of money in the company. All the pro- coupe priced around $160,000. It’s a four- sine is so powerful that it can achieve duction facilities are being completely seat car with a 500-plus horsepower unprecedented speeds? reworked, and we’ve invested heavily in engine that can easily do more than 180 For obvious reasons, we cannot give people. We’ve hired an additional 350 miles an hour and goes from 0 to 60 in specific performance details of the Bentley engineers; plus, we have a new design less than five seconds. Additionally, it pos- State Limousine but, suffice it to say, the department. And we’ve restructured both sesses all the luxury and craftsmanship V8 6.75 liter Bentley engine is taken from our sales and production organizations. you would expect from a Bentley. So it’s a the Arnage Series II, and gives Her Majesty’s So it’s really a complete turnaround. And, unique combination. chauffeur more than enough power and of course, at the core of this restructur- How has the market responded performance – under all circumstances ing is the new product. In addition, to the new Continental GT? You’ve produced a customized we’ve returned to Motorsport for the first The response has been exciting and Arnage limousine with jump seats, a time since 1930, and our success at Le definitely much stronger than we ex- television, and special communica- Mans in the past two years has clearly pected. We already have more than 2,500 tions tools. Will you eventually offer established Bentley as an exciting mar- customers who have placed deposits, customized cars all over the world? que with a performance heritage and which I think is very unusual. Most of our cars already go through future. Can we expect other such excit- some personalization before they’re deliv- In the meantime, if a person ing models in the future? ered to our customers. So our Bentley wants to buy a Bentley now, will the Yes, the Continental GT is only the Mulliner section of the business has been current products already benefit first in a family of cars. We plan to intro- carrying out a wide variety of special work from Volkswagen’s ownership of the duce a luxurious, four-door sedan with on our cars right now, and has been doing Bentley brand and, consequently, similar technology, but with a much big- so for many years. We’re planning to VW’s expertise? ger interior, of course, and marketed expand that business even further to the Bentley already benefits from the best toward a different type of customer. This extent that Bentleys such as the state of both worlds. On one hand, of course, we sedan will be based on the Continental GT limousine will be normal business for us. have free access to all the technology, pro- and will be on the market at the end of You arrived at Bentley in March cesses, expertise, and testing facilities that 2004. 2002. Since that time, many changes exist within the Volkswagen Group. It’s a Bentley custom-built the Queen have taken place, and today the en- great benefit to have such a huge company of England’s new official state lim- tire company is being revitalized. behind us. But, at the same time, we’re very ousine. How did you receive such a What have you done specifically to ef- careful about preserving the Bentley culture commission? fect these changes, and how have you and the marque. We’re proud to be a First and foremost, we employ a lot put the word “Bentley” back on ev- British company with such a long heritage, of people, and the Queen was keen to eryone’s tongue? dating back to 1919, and with a strong

VOLUME 26, NUMBER 2 POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC. LEADERS 45 motorsport history. So I think all of these course, we have to guarantee that the ser- ple, the engines and chassis we want. But, elements – the group technology, systems, vice standards are at least on the same on the other hand, we have excellent hand- and facilities; the culture of the Bentley level as those offered by the competition. craftsmanship in our wood and leather and marque; and the incredible skill and craft of Part of what we offer is 24-hour full ser- personal commissioning departments – the our people – really come together well to vice to customers worldwide – no matter elements that are typical of all Bentleys. form a unique company. where they are. This can only be achieved by the craftsmen Many people like to buy a Bentley This is quite a special thing to and women who have been honing their and keep it for a number of years. say. It would be nice if you could just skills at Crewe for nearly 60 years. Will these new models still be known take a Bentley into an Audi dealer- Are Rolls-Royce and Maybach for excellence in the years to come? ship and have them take care of it. major competitors for Bentley? I can personally, without any hesita- Will that be possible? I don’t think so because I consider a tion, strongly recommend that customers I wonder about that. But as of now, Maybach, as well as a Rolls-Royce, a typical do just that because this new Bentley is we can give customers a phone number car to be driven in, while a Bentley – par- absolutely terrific. There’s nothing I can that guarantees their cars will be serviced ticularly the Arnage T – is a driver’s car. think of that could keep me from recom- quickly. This helps us solve problems in Dr. Bernd Pischetsrieder, the mending the Continental GT as a long- the shortest possible time. chairman of Bentley’s parent com- term investment. In the future, will the current pany, Volkswagen, recently told LEAD- One of the problems that Rolls- Rolls-Royce/Bentley dealerships be- ERS that an Audi is a car to drive, Royce and Bentley owners have had come solely Bentley dealers? Will you while the new Volkswagen Phaeton is in the past is service. How are you work with the same dealers as before? a car to be driven in. You’ve said that improving your customer-service Bentley is a car you policies, particularly at the deal- can both drive and erships where repairs are made? be driven in. Will Over the past few years, we’ve that remain consis- worked very hard to improve the tent in the future? quality of our vehicles, and the Well, in general it improvements have been dramatic. is true that, depending However, this doesn’t help customers on the model, a Bent- who own an older product, so we ley can be driven or have to solve their problems in a dif- be driven in, as Bent- ferent way. We are therefore com- leys are luxury perfor- pletely turning the company around mance cars, but the at the moment, including major Continental GT is a investment in our dealer network. We real driver’s car. are implementing a completely new Bentley was tra- dealer network strategy, which ditionally known for includes new standards and increased producing sports personnel training, and of course the and racing cars. Is that still an impor- The Bentley Arnage R (left) and the new Continental GT tant area for you? Our racing history We’ll be work- is one of the biggest assets we have. In ing with our existing 2001, we returned to Le Mans and saw dealers under new one of our biggest successes there. This contracts and new year we plan to race there a third time, dealer standards, as and hopefully we’ll be on the top step of I mentioned before. the podium. Rolls-Royce will have You must have a lot of fun driv- its own contracts ing these cars, which are at your dis- with them. Many, posal to take home every day? but not all, dealers, Well, it is not as simple as you may which have been think. Sometimes I have to drive them both Bentley and for test purposes. But, of course, there’s Rolls-Royce dealers a car for the chairman, and it’s a lot of in the past, will also fun to walk out the door in the morning sell both brands in and see a Bentley sitting there. the future. You’re now the chairman of roll out of our new corporate identity. Ultimately, what is it that makes a truly historic British brand. But Your price point is competitive Bentley unique? What do you have at you actually spent the bulk of your - with both BMW and Mercedes, which Crewe that other car companies career in the German automobile are known for good service. Do your don’t have? industry, achieving great success American customers have easy ac- Our product is unique because it at Audi. How did you become an - cess to service, no matter where they combines all the features of a racing sports English businessman? live? Or can Bentleys only be ser- car with all the luxury imaginable in an Well, I’m still working on becoming viced in larger cities where you have automobile. So it’s both sporty and luxuri- English, so to speak. I don’t think it can dealerships? ous at the same time, and that’s a unique be achieved in a short time, and maybe I’ll Our dealer network is smaller than combination. It’s truly one of a kind. never get there. However, I’m totally dedi- those of bigger brands. However, this is Of course, creating this type of prod- cated to preserving and building upon the part of the exclusivity that comes with our uct requires special skills. So, on one hand, culture of this company, especially its cars. Our positioning is higher than that of we have the highest possible level of Britishness, if you will, and that demands Mercedes or Porsche, for example. But, of mechanical engineering to create, for exam- a lot of work on a daily basis.• 46 LEADERS POSTED WITH PERMISSION. COPYRIGHT © LEADERS MAGAZINE, INC. VOLUME 26, NUMBER 2