VW in 'advanced talks' about second Tennessee plant

VW in 'advanced talks' about second Tennessee plant

December 4th, 2018 by Staff and Wire Reports in Breaking News

Herbert Diess, CEO of the Volkswagen stock company, poses for the media prior to the shareholders' meeting in Berlin, Germany, Thursday, May 3, 2018. (AP Photo/Michael Sohn)

Photo by Michael Sohn

This story was updated at 5 p.m. on Tuesday, Dec. 4, 2018, with more information.

Volkswagen Group's chief executive said Tuesday after a White House meeting that the company is in advanced talks with Tennessee about a second plant, but added there are other options.

USA Today reported that Volkswagen CEO Herbert Diess told reporters that the company is talking with Ford Motor Co. about potentially making vehicles at the American carmaker's plants.

Volkswagen already has a plant in Chattanooga which makes the Passat sedan and Atlas SUV.

President Donald Trump has pressed foreign automakers to make more vehicles in the U.S. and threatened higher tariffs on imports.

Trump met with executives from Germany's big automakers amid the U.S.-European trade tensions.

Trump "shared his vision of all automakers producing in the United States and creating a more friendly business environment," the White House said in a statement afterward. The statement did not mention whether Trump raised tariffs with the automakers.

Executives from BMW, Daimler and Volkswagen were invited to individual meetings with Trump's top economic advisers to discuss investment opportunities in the United States, including in manufacturing and research and development, the White House said.

Last week, the top Volkswagen Group of America official said at the Los Angeles Auto Show that the company was scouting sites for electric vehicle production.

That official, Scott Keogh, said Chattanooga was an option because there's enough room for extra assembly there.

Volkswagen and Ford have been in discussions about a global alliance. The option of utilizing Ford production comes as the carmaker is reducing its American car manufacturing capacity.

Trump has threatened to slap tariffs on auto imports from Europe and other countries, citing U.S. trade deficits with those nations. Trump is relying on tariffs, and the threat of imposing them, to force other countries to buy more goods from America.

"I am a Tariff Man," the president said Tuesday in one of a series of tweets about a new round of trade talks with China after the world's two largest economies imposed tit-for-tat tariffs on hundreds of billions of dollars of each other's goods after Trump struck first.

"When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN."

Trump had threatened to tax imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion, and the European Union had warned that it would retaliate with tariffs on products worth $20 billion if Trump put duties on cars and auto parts from Europe.

But Trump and European leaders stepped back from the brink of a trade war over autos during the summer, agreeing to open talks to tear down trade barriers between the United States and the EU.

Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer, chief economic adviser Larry Kudlow and other administration officials were meeting individually with executives from each of the three automakers.

Kudlow, director of the National Economic Council, said administration officials want to talk to the German car makers "about a lot of things."

"I don't think this meeting or anything else for that matter, right now, is moving toward car tariffs," Kudlow told reporters Monday. "The president has said it's in his quiver of arrows, sure, but none of that's changed."

In Berlin on Monday, German Chancellor Angela Merkel also tried to tamp down speculation about tariffs, dismissing suggestions that the automakers could even conduct trade diplomacy. Merkel stressed that trade negotiations are the responsibility of the EU.