VW promise and gasoline scare

Sunday, June 22, 2014

CrossBlue To Be VW Gold?

Since Volkswagen needed to be manufacturing its new sport utility vehicle, like, yesterday, it's good news that the Chattanooga plant is apparently going to be the site where it will be produced.

DTS News Agency, crediting the daily Frankfurter (Germany) Allgemeine Zeitung, reported the announcement is to be made soon.

Tennessee's offer, which industry officials said had to beat that of Mexico, where VW's Puebla plant has been manufacturing vehicles for 50 years, is said to be worth about $300 million. That amount includes tax breaks, staff training and infrastructure upgrades.

Of course, that, in turn, means hundreds of new jobs, millions of new investment dollars for Chattanooga and more money flowing through the Scenic City economy.

When the new SUV, based on the CrossBlue concept unveiled by VW in Detroit in 2013, rolls off the line, it won't be a minute too soon for the German company. The car would be scheduled in dealer showrooms in 2016, four years after VW broke its own 40-year-old sales record in 2012.

With the Chattanooga-made Passat receiving praise and other VW vehicles selling well, Chief Executive Officer Martin Winterkorn said in a letter to stockholders in the company's 2012 annual report that things looked good "to make us the world's leading automaker by 2018."

Since then, sales have not been as brisk, though, and the company has had nothing to offer customers between its compact Tiguan and its more-expensive-than-Lexus Touareg.

But with Chattanooga workers possibly making the CrossBlue an attractive, sound and economically viable vehicle, VW's sights could be back on track.

Energy Independence Partner Needed

If there is a threat of a hurricane (but no hurricane) in the Gulf of Mexico, gasoline prices go up. When tensions rose between Israel and Iran in 2012 (but no conflict ensued), gasoline prices went up. Today, though the United States does not import any Iraqi oil but with militants seizing cities and threatening oil assets in the country, gasoline prices are on the rise.

Still, according to experts, any threat of a shortage of oil supplies produced by Iraq has the potential to drive up world oil prices, which, in turn, eventually filter down to the U.S. market and raise prices at the pump.

Industry analysts say the problem would be even worse if energy independence in the United States wasn't growing. But imagine how much closer the country would be to energy independence if it had a partner in that goal in President Barack Obama.

Data this spring from the Department of the Interior's Bureau of Land Management show the federal government's issues of new on-shore oil and natural gas leases and permits the lowest in more than 25 years. In 2013, for instance, leased Bureau of Land Management acres decreased 600,000 from 2012, oil and natural gas leases fell by more than 250 and drilling permits fell by nearly 500 from 2012.

"This data confirms that the Obama administration is purposely stifling American energy production wherever it can," House Natural Resources Committee Chairman Doc Hastings, R-Wash., told the Washington Examiner in April. "Since Obama took office, total federal oil production has declined 7.8 percent, and federal natural gas production has declined 21 percent. This is unacceptable and forfeits the opportunity to create good-paying jobs and grow our economy."

Maybe after the November election, when the president might be less inclined to appease the environmentalist, far-left fringe of his party, Obama will take steps to increase that independence. But don't hold your breath.