Tennessee: 3 states wait for VW plant decision

Volkswagen AG’s top managers put off an expected recommendation on a U.S. assembly plant site, even as a new report touted Tennessee and Alabama each landing VW facilities.

The company’s supervisory board, the equivalent of a U.S. board of directors, is scheduled to meet July 15, with a decision on a plant site likely to be announced afterward.

There could be several reasons why VW officials didn’t make a decision Tuesday on a new plant site when its management board met in Frankfurt, Germany, said Jim Bruce, president of industry site consulting firm Bruce Facility Planning Consultants of Atlanta.

“It could be incentives,” he said, adding that states may be asking VW to hold off an announcement until they complete offers.

Or, he said, Volkswagen managers are “dotting i’s, crossing t’s and making sure everything is triple-checked.”

The German automaker said its management board met for a few hours Tuesday but did not choose among Alabama, Tennessee and Michigan.

Mike Randle, who runs an industry Web site, SouthernAutoCorridor.com, said more than one source has told him Volkswagen is eyeing plants in Tennessee and Alabama.

Volkswagen officials are looking at a site in Limestone County, Ala., near Huntsville, for the German automaker’s first U.S. assembly plant in 20 years, he said. But a major project involving Volkswagen is earmarked for Enterprise South Industrial Park in Chattanooga, and the project is believed to be the automaker’s engine and drive-train facility, he said.

Mr. Randle cited Nissan’s assembly plant in Smyrna, Tenn., and its drive-train plant in Decherd, Tenn., about an hour away, as an example of an automaker having two facilities near each other. The Decherd plant employs about 1,200 people; the assembly plant has about 5,600 workers.

Having two major facilities in a pair of states would give VW more political clout, he said.

“It gives you four senators instead of two and two governors instead of one,” Mr. Randle said.

Mr. Bruce said Volkswagen, Europe’s largest automaker, is large enough to handle startup investments at two plants. And “they don’t have the (engine) operation in the U.S. right now,” he said.

However, Chattanooga officials said they are continuing to work for the assembly plant project, which eventually could mean 2,000 jobs. In addition, there could be double that number of supplier jobs in the area for the winner of the VW assembly project, officials said.

Tennessee Gov. Phil Bredesen is vacationing this week, the governor’s director of communications, Michael Drescher, confirmed.

“If something were to happen, he’s reachable,” Mr. Drescher said.

Efforts to contact Mark Drury, assistant commissioner of communications and creative services for the state's Department of Economic and Community Development, were unsuccessful.

Michigan Gov. Jennifer Granholm told reporters Tuesday she realizes it will be tough to draw a Volkswagen plant to Michigan.

“But we’ve put everything we’ve got on the table," she said.

She has met with company leaders, she said, and Michigan has the kind of skilled workers Volkswagen needs. “We have been in there slugging,” she said.

Automotive News’ sister European newsletter has said the site near Huntsville, Ala., is the lead candidate, though Tennessee is a close second and Michigan no longer is under consideration.

The newsletter said VW may use the new assembly factory to build a Jetta sedan and an all-new sedan that will be about the same size as the VW Passat. A long-wheelbase version of the Tiquan sports utility vehicle and Audi’s forthcoming Q5 sports utility vehicle also are being considered for production at the plant, the newsletter said.

Staff writer Andy Sher contributed to this story.

The Associated Press contributed to this story.