published Sunday, May 4th, 2014

Kennedy: Why VW should build its SUV here

Now that the union vote at VW has been certified, sides should back away from that donnybrook and make way for a new Chattanooga-made SUV.

VW is apparently still pondering where to put the assembly line for its new seven-passenger SUV -- tentatively called the CrossBlue -- which is part of a planned $7 billion investment in North America this decade.

The decision comes down to Chattanooga (home to America's newest car plant), or Mexico, where VW has been building automobiles for 50 years and already has a plant with more than five times as many employees as Chattanooga's. If VW's auto plant in Puebla, Mexico, were a city, it would be about the population (15,000) of Sevierville, Tenn.

At the end of the day, money talks, and the company will likely build the car at the location that offers the best combination of government sweeteners and trade advantages. Still, VW's corporate leaders are human beings and will no doubt consider intangibles, too.

So, today we offer three good reasons the new VW SUV should be built in Chattanooga.

• The success of the Passat. All the headlines about the UAW's attempts to organize workers at the plant has obscured one important fact: The launch of the American-made Passat has been a success.

The Passat, which debuted for the 2012 model year, was voted Motor Trend's "Car of the Year." The fact that this coveted honor was given to a car coming off a clean-sheet redesign, being produced at a brand-new plant with mostly inexperienced workers, is the equivalent of a first-year NFL expansion team winning the Super Bowl. It just doesn't happen.

And don't be overly concerned by recent reports of slumping year-over-year Passat sales. Family sedan sales are notoriously cyclical and usually peak near the middle of a five-year product cycle. A promised freshening of the Passat's design next year should help boost sales until a more substantial redesign arrives in a couple of years.

Meanwhile, America is hungry for an affordable, family-sized SUV equipped with VW's great turbo-diesel engines. It's a niche that's there for the taking.

• Made in the U.S.A. means something. There's a reason many of best-selling SUVs in the world are made in America. With props to the English company Land Rover, the boom in SUV sales is a uniquely American phenomenon.

Even most of the European and Asian automakers seem to have concluded that there are advantages to building a vehicle with U.S. workers who understand and embrace the product. For example, BMW makes SUVs in South Carolina, Mercedes-Benz in Alabama, Hyundai in Georgia and Infiniti in Middle Tennessee.

See a pattern? We should be the next star in a constellation of SUV plants.

Meanwhile, VW already has one of the best SUVs on the market: the low-volume Touareg. I test drive cars as part of my job and the Touareg TDI is one of the most refined, best-performing SUVs out there.

But the Touareg has several problems -- its luxury price tag (which can easily top $50,000), its five-passenger seating arrangement (which rules out carpooling for some families) and its unconventional (to say the least) name.

You could stand on a street corner and offer to give a free Touareg to the first person who could spell it, and I'll bet at the end of the day you'd still have your keys.

But an SUV named CrossBlue, frankly, sounds like an insurance company with dyslexia. Would someone please assemble a focus group on this?

• Chattanooga is ready for the challenge. With all due respect to Mexico, Chattanooga is uniquely positioned for this new vehicle line. The assembly plant here was clearly built with expansion in mind and the work force is willing (and has proven able).

The VW operation in Mexico has had a history of work stoppages, including one in the late 1980s that lasted nearly two months. Wages are lower there, granted, and trade laws are favorable, but VW should not be penny wise and pound foolish on this choice.

If VW really wants to be the biggest car company on Earth it needs to increase its manufacturing footprint in the nation with the biggest economy in the world.

If that happens, look out.

Which brings us back to that iffy name -- CrossBlue.

I humbly suggest that VW build its new SUV here and call it -- drum roll, please -- the Volkswagen Lookout.

Contact Mark Kennedy at mkennedy@timesfreepress.com or 423-757-6645. Follow him on Twitter @TFPCOLUMNIST. Subscribe to his Facebook updates at www.facebook.com/mkennedycolumnist.

about Mark Kennedy...

Mark Kennedy is a Times Free Press columnist and editor. He writes the "LIfe Stories" human interest column for the City section and the "Family Life" column for the Life section. He also writes an automotive column, “Test Drive,” for the Business section. For 13 years, Kennedy was features editor of the newspaper, and before that he was the newspaper’s first Sunday editor. The Times Free Press Life section won the state press award for ...

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rt said...

Do you know what else means something..? Union Made... Bye bye SUV....and eventually...bye bye VW.... They'll take them both up north...like when they pulled out of Pennsylvania...

May 4, 2014 at 9:59 a.m.
TheCommander said...

"At the end of the day, money talks, and the company will likely build the car at the location that offers the best combination of government sweeteners and trade advantages."

Wacker, Amazon, Whirlpool, Hemlock, Electrolux, VW, etc... all in PILOT programs, all not paying into our tax base while consuming massive services. Hamilton County added $42 million in debt "year over year". How is that for the economic impact of VW on our area Mr. Kennedy?

"And don't be overly concerned by recent reports of slumping year-over-year Passat sales. Family sedan sales are notoriously cyclical and usually peak near the middle of a five-year product cycle. A promised freshening of the Passat's design next year should help boost sales until a more substantial redesign arrives in a couple of years."

Isn't the "middle of a five-year product cycle" 2 1/2 years? We have now been selling the Passat for 2 years of that supposed cycle and sales are already tanking and you are telling us not to be "overly concerned" about OUR investment that our government should have never made?

RT, good job. Keep reminding people of what happened in Pennsylvania.

May 4, 2014 at 1:56 p.m.
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