Volkswagen’s chief executive says the automaker, which is building an assembly plant in Chattanooga, may seek access to the $25 billion in low-interest federal loans approved by Congress last week.
“We will raise our hand when the time comes,” VW CEO Martin Winterkorn said to reporters at an auto show, according to Bloomberg News. Mr. Winterkorn said the German car maker should get access to the program to avoid skewing competition.
Volkswagen plans to build a $1 billion assembly plant at Enterprise South industrial park that would employ 2,000 people. Company officials hope to start pouring concrete in November.
President Bush has signed a broad spending bill that includes $7.5 billion to pay for the $25 billion loan program to help automakers and supplier companies transition plants to building more fuel-efficient vehicles.
General Motors, Ford and Chrysler are facing liquidity problems as they try to restructure amid current economic conditions.
Erich Merkle, an auto analyst for Crowe, Cheziek and Co., said the industrial policies in Europe should be sufficient for automakers headquartered there.
“I’m not in favor of loans to GM and Ford,” he added. “I’m more of a free market economist.”
VW Group of America spokeswoman Jill Bratina said the company plans to monitor the regulations for use of that money as they are being drafted.
“We have no plans as of now, but should we decide to, we would expect the same opportunities as other companies who invest and manufacture in this country,” she said.
The U.S. Department of Energy has started a two-month process to write the parameters around which auto companies can apply for the loans.
The automakers will have to show the money is aimed at modernizing plants and technology to deliver more fuel efficient vehicles to the public.
Mr. Merkle said he isn’t in favor of the federal fuel standards either, known as the Corporate Average Fuel Economy, or CAFE, regulations, intended to improve the mileage of cars and other vehicles.
“Let the market decide what’s going to be produced,” he said. “Gas prices are falling now. The big fear is that cheap gas will force automakers to include technology people won’t want to pay for.”
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 ...