Monday, June 30, 2008

Volkswagen will purportedly make decision regarding US plant by July 8

It has been talked about a lot over the last couple of months and many states have been tossed around as a possible location for the forthcoming Volkswagen plant in the US. Auto Motor und Sport claims that Alabama and Tennessee are on the shortlist, with Michigan out of the picture as possible locations. We should know the final decision by the 8th of this month.

The $788 million plant may be up and running as early as 2011 and Volkswagen hopes to achieve a realized capacity of 300,000 units per year. No word on what vehicles will be built on the line.

Source: Autoblog

2 Comments:

Anonymous Ben said...

I find it interesting that very little has been said about Michigan to this point. Both Alabama and Tennessee have clear locations where a plant would go. We don’t even know what city VW is/was considering in Michigan. That’s really too bad, as I suspect Michigan’s incompetent state government isn’t able to sell the state the way the others have. Of course we could all be surprised, but that remains to be seen. Not having traveled the area, I didn’t realize that the two sites in AL and TN are relatively close to each other (approximately 100 miles). Still, I think the clear winner is the site in Tennessee, and here’s why:

*Time: VW originally insisted that the site would be located in the Eastern Time Zone, as it makes it more convenient to communicate with people in Europe. Chattanooga is on EST, Huntsville is on CST.

*Location: VW has not just said but shown that their largest customer base is located on the east coast by moving their headquarters to VA. Thus, it would make sense to have a factory within reasonable distance to that base. Not only is Chattanooga physically closer, it also has MUCH better highway access to eastern markets via I-75/I-81, whereas the site in Alabama only has good north/south access via I-65. Furthermore, I know almost nothing about Chattanooga, but the one thing I do know is they’re a railroad town and again the advantage in transportation goes to them.

*Workforce: Alabama has been hugely successful in attracting new investment from Mercedes, Hyundai, Honda, Toyota, and others. However, I recently read a story about Hyundai having major problems trying to find qualified people for the more skilled jobs at their plant. Tennessee has not had quite the growth in the automotive sector, and even seen some downsizing with the realignment of the Saturn facility in Spring Hill and a few cutbacks at Nissan. Thus, it is far more likely that there would be a sufficient pool of qualified skilled workers.

Alabama’s main trump car is that historically they have been extremely generous with their incentive packages, sometimes to the point where they’re close to making a larger investment than the new company. Certainly Tennessee will try to be competitive, and also VW may not be swayed as much by incentives as other characteristics. The airport in Huntsville also has direct service to Washington DC, although I’m sure it wouldn’t be difficult for Chattanooga to add a flight to their airport given that there would be regular demand.

Finally, I will say that whichever of the two loses out on the assembly plant has a good chance of landing the proposed engine/transmission plant given their proximity to each other. It will be an interesting story to watch.

Tue Jul 01, 08:03:00 AM  
Anonymous Ben said...

Yessirree, I called that one right there. Congratulations to Tennessee and the city of Chattanooga.

Tue Jul 15, 07:26:00 AM  

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