Volkswagen has announced the location of their new U.S. plant. And the winner is… pardon me boys… Chattanooga. The Tennessee plant will be located in an existing "industrial megasite" to "produce a car designed specifically for the North American consumer." (The last time VeeDub tried building something specifically for the American market, they "Malibuized" the Rabbit– and retreated to the Fatherland, (cotton)tail between their legs.) VW figures on a 150k per year initial capacity for the new facility, which will begin production in "early 2011." "The U.S. market is an important part of our volume strategy and we are now very resolutely accessing that market," Martin Winterkorn, VW's CEO said. "We will be selling 800,000 Volkswagens in the U.S. by 2018 … [which] along with our growth strategy, is a prerequisite for the economic success of the company in the dollar region." Does that boy even know how to speak English? Anyway, inhabitants of the Tennessee Valley area of "the dollar region" are bound to appreciate the $1b VW's expected to pour into the local economy.
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Said Governor Granholm, “I am not going to give tax breaks to wealthy corporations!”
As an Alabamian, I was a little disappointed (especially since all the industry leaks favored us). But as a taxpayer, I’m happy we don’t have to shell out any more money for yet another auto manufacturer.
Chattanooga is a great area and could definitely use the job growth. Plus, VW will be within 3 hours by road from plants for Honda, Hyundai, Mercedes, Nissan (several), Saturn, Toyota, and BMW. The supplier economies are really starting to come together in this region.
I’m a bit concerned, as this seems to be VW betting on a weak Dollar well into the future.
shaker
Probably so, but one could say the same about all the other foreign mfrs I listed above, most of which moved here during a strong dollar. It’s probably just good long-term diversification for growing US market share.
It’ll be interesting to see what this special vehicle is that’s specifically designed for North America. I hope it’s not a Passat with chrome all over it, a V8 and 30 cupholders.
On a related note, dealers are apparently selling out of Jetta TDIs, and it’s only early July. And VW might actually make a Tiguan TDI available. http://tinyurl.com/5ej93w
shaker
I don’t think VW is betting on anything. The dollar should stay weak for at least as long as it takes to pay off the “Global War on Terror”.
It’s probably safe to say VW has at least 25 years to cash in.
Excuse my ignorance, but what’s the meaning of this: “Malibuized” the Rabbit”
brettc – I hope it’s not a Passat with chrome all over it, a V8 and 30 cupholders.
That’s pretty much what they did to the Jetta. It got fatter, sprouted chrome, and the suspension went all soggy. I don’t understand how they are selling well. It must just be the engines?
guyincognito, do you think Michigan ever had a shot at this plant? VW was just saying that we did to placate us for moving their HQ. Granholm could have given them 20 years of tax free operation and I’d be willing to bet it wouldn’t have made a damn bit of difference.
But they haven’t exactly set the world on fire with sales lately, and I think their long term goals are beyond stretch, so I wonder if this plant will eventually meet the same fate as the Pennsylvania one.
…begin production in “early 2011.”
What caused them to miss the magical 2010?
It is not so much betting on a weak dollar, it is just that the weak dollar exposed their vulnerabilities. By having manufacturing in the US, they are hedging against further moves, either up or down, so that they aren’t in this situation again. It is a good move, especially for a business like this, where now they also don’t need to worry about shipping the cars across the ocean.
As much as they have failed to live up to their potential in the last 20 years VW has a lot of upside potential in the US.
With some better products and less stingy warranty coverage they could expand into the void that will be left by the likely failure of the Domestic 2.8.
I’d buy a AWD Jetta TDI with 10yr/100k coverage.
Chattanooga is quite a nice town these days, and they desperately needed new industrial jobs after losing so many recently, so I’m happy for the folks in SE Tenn.
Unrelated: Bring back full RSS feeds please!
Stingray: Excuse my ignorance, but what’s the meaning of this: “Malibuized” the Rabbit”
The rectangular headlight Rabbits that VW built in Westmoreland, Pennsylvania were spec’d out with pie-plate hubcaps, mushy suspensions, wide-ratio transmissions, and whore’s-drawers interiors. Reliability was crap. They were sucktastic.
Yes, Stingray, Verbal speaketh truth here.
Malibu-ization was the actual term used at the time.
VW had hired some flack from GM and set to making the original Golf, sold here as the 1975-78 Rabbit not only American-made, but suited for ‘American’ tastes.
(Don’t think Matt Damon here, think rather of the blue light flashing on aisle 4 at K-Mart)
Hideous Datsun-style total color-coordination (the inside rear view mirror housing was the same horrid baby-blue as the rest of the interior) came to the previously serious German car.
Compare:
http://www.thesamba.com/vw/archives/lit/77rabbit.php
http://www.thesamba.com/vw/archives/lit/79rabbit.php
Ha!, I predicted Tenn. months ago!!
“Americanize” is a stupid term. I would believe that most Americans would not want crappy handling and garish interiors. The Guy was out of his mind.
You have to understand it was the 1970’s. Garish? How about the Chrysler Cordoba with “fine Corinthian leather”. Handling? The Oldsmobile Cutlass Supreme was a huge seller and was considered a “sports coupe”. That was my father’s Oldsmobile.