German automaker Volkswagen AG today is expected to unveil a key signpost in its road map to building cars and increasing sales in the United States.
Hamilton County officials have been optimistic the route runs through Chattanooga.
But an auto industry publication put Limestone County, Ala., near Huntsville as the leader in the race for the investment that could reach near $1 billion and eventually create 2,000 jobs. Michigan also was mentioned as a plant site.
Europe’s biggest auto company by production is to end a monthslong search for a site to locate a new assembly plant designed to help it quadruple sales in the U.S. by 2018.
Chattanooga officials were upbeat Monday about the city’s chances to land the plant at Enterprise South industrial park.
Wayne Cropp, who heads the Chattanooga’s Enterprise Center, said the results of landing the VW assembly plant would be widespread to the area’s economy.
“If we get the win and are able to attract VW here, I think the implications aren’t fully realized,” he said.
VW’s strategy is to sell 800,000 cars in the U.S. That includes making cars in America, something the company hasn’t done since it closed a plant in Pennsylvania in 1988.
On Monday, Automotive News reported that a cheaper replacement for the Volkswagen Passat developed primarily for the U.S. likely will be assembled at the plant.
Eventually, a Jetta replacement also could be assembled there, the publication said.
Ed McCallum, an industry site consultant for McCallum Sweeney in Greenville, S.C., said if Volkswagen is going to be a stronger competitor, it needs to go to the markets it serves such as the U.S.
“They’re building a fine product,” he said. “They’re going to do very well.”
Economist Paul Taylor of the National Automotive Dealers Association said VW earlier this decade had several bad sales years, but the numbers are improving.
“They’re making a significant recovery from those years of slow sales,” he said. “They’re moving quickly.”
Stefan Jacoby, Volkswagen Group of America’s president and chief executive, in April said the automaker was evaluating cost, logistics, site readiness and operational considerations as it looked at Tennessee, Alabama and Michigan.
Chattanooga marketed Enterprise South in Tyner to automotive companies, and it was a finalist last year for a Toyota Motor Co. plant that eventually went to Tupelo, Miss.
In May, U.S. Sen. Bob Corker, R-Tenn., hosted a dinner at his North Chattanooga residence for a Volkswagen delegation, state and local government officials and area business leaders.
The state delegation included Gov. Phil Bredesen, state Economic and Community Development Commissioner Matt Kisber, Labor Commissioner Jim Neeley, Revenue Commissioner Reagan Farr and Environment and Conservation Commissioner Jim Fyke.
Also included were University of Tennessee President John Petersen, U.S. Sen. Lamar Alexander, R-Tenn., Chattanooga Mayor Ron Littlefield and Hamilton County Mayor Claude Ramsey.
Volkswagen officials said the surging euro has pushed plans for a new production facility forward. The 15-nation currency has been hitting record highs in recent weeks against the U.S. dollar, making goods exported from Germany more expensive in the United States.
Volkswagen recently moved its North American headquarters from suburban Detroit to Herndon, Va., outside Washington, to bring it closer to its East Coast customer base.
Volkswagen produces VW cars and trucks and also makes vehicles under the Audi, Skoda, Seat, Lamborghini, Bentley and Bugatti names.
Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...