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VW looking for US plant site

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Volkswagen mulls move to U.S.

By Woody White

BUSINESS WRITER

[email protected]

German automaker Volkswagen says it is considering building VW and Audi brand vehicles in the United States, mainly in response to a weak dollar that is affecting the company's bottom line.

The SC Commerce Department said it would take its cue from Volkswagen and try to learn more about the company's intentions.

Georg Fiandorfer, Volkswagen's head of sales and marketing, told the German newspaper Frankfurter Allgemeine Zeitung the company is mulling a U.S. operation that would manufacture models that might be big sellers here. He said an Audi SUV now in the planning stages might be a natural candidate for U.S. production.

Company officials did not say where they might look in the United States, but rivals BMW and Mercedes both make their big SUVs in the Southeast. BMW assembles its 5,900-pound X5 in Greer, while Mercedes manufactures its M-class vehicles in Vance, Ala.

BMW's 10-year-old Greer manufacturing facility has been one of the greatest success stories in state business history. The company has created about 4,700 high-paying jobs — mostly in production — at its massive plant along Interstate 85, and its supply network provides paychecks for another 12,000 workers in the state.

Clare Morris, the Commerce Department's communications director, said "the state aggressively woos big carmakers from all over the globe." She said the automotive industry "is one of our targeted industries and our foreign offices in Munich and Tokyo are key to helping us get in front of many automotive companies."

Recruiting a second automotive assembly plant was among the recommendations a consulting group made last year in a study on developing the South Carolina economy.

Harvard Business School professor Michael Porter and his consulting group, The Monitor Group, concluded in the report that having only one vehicle assembly plant was a weakness of the state's automotive industry "cluster."

The study was commissioned by the state departments of Commerce and Recreation, Parks and Tourism, as well as private groups such as the South Carolina Chamber of Commerce and The Palmetto Institute.

Frankfurter Allgemeine Zeitung said Volkswagen expects losses of about 1 billion euro ($1.32 million) from U.S. operations this year, primarily because of the currency situation.

A weak dollar means that goods produced in the United States are cheaper overseas, which can pump up demand for domestic goods and services because they cost less than similar products manufactured in local foreign markets.

On this side of the Atlantic Ocean, a weak dollar raises prices for imports, which gives U.S. manufacturers pricing power because they don't have to cut prices to compete.

The strong euro puts pressure on manufacturers of products like European cars or French wines, whose dollar prices either have to go up or the companies have to live with lower profit margins.

Volkswagen has traditionally been the leader among European brands in U.S. sales, but the mass-market car company is facing stiff competition from luxury brand BMW for domestic supremacy.

Volkswagen sold 234,642 vehicles in the United States in the first 11 months this year, just a few dozen more than BMW.

Moreover, Volkswagen sales plunged 40.5 percent in November, continuing a long trend since 2001, when the company sold a record 355,648 vehicles in the United States, the trade publicaaion Automotive News reported.

BMW's domestic sales are up 6.7 percent year to date, led by its SUVs — the X5 and the lighter, less powerful X3, which is manufactured in Austria.

According to Automotive News, Volkswagen has led European brands in U.S. sales every year but 1993, when its Mexican plant was shut down for a while and there were few VWs in dealer showrooms. Business Writer Rudolph Bell contributed to this report.

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Today in the Daily Record, I read that Jacksonville business leaders were hoping the city would reach out internationally. Jax already has a deal with a Brazilian airplane maker to open up in the Cecil Commerce Park. It would be nice to get some more companies, espially VW!

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I wonder if this is simply VW's response to the market's complaints that the cars coming out of Puebla, Mexico (North American New Beetle, Jetta, and Golf) are sub-standard when compared to the cars coming out of the Autostadt. I would really like to see them here; I work for the 3PL that manages supply chains for the Big3, American Honda, and BMW's Greer, SC plant (among many others) and the impact is far more reaching than just those jobs created within the plant.

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Yesterday in the Wall Street Journal, an article mentioned that Toyota was looking for a site for a new plant. Ten states have been in contact with Toyota thus far. The article listed about five of the ten including Alabama, Mississippi and Kentucky.

Considering how close Cecil Field was in the running for Daimler/Chrysler awhile back, I certainly hope the city and state are working on both VW and Toyota.

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I wonder if this is simply VW's response to the market's complaints that the cars coming out of Puebla, Mexico (North American New Beetle, Jetta, and Golf) are sub-standard when compared to the cars coming out of the Autostadt.  I would really like to see them here; I work for the 3PL that manages supply chains for the Big3, American Honda, and BMW's Greer, SC plant (among many others) and the impact is far more reaching than just those jobs created within the plant.

<{POST_SNAPBACK}>

i happen to own one of those "sub-standard" Jettas from the Puebla plant in mexico, and man do you have that right. I am on recall no. 5 and counting, and have had numerous problems and not happy with the vehicle. i even called VW usa to tell them that their car was a "piece of 'you know what'" and that they should know that. Anyways, i remember we went after that chrysler plant to build the vans and lost it to SC as well, no??? what's with SC, i mean i know that no more mini-bottles, but come on>>> this is FLORIDA damit.

thanks

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Until the State of Florida offers the type of incentive money that other southern states, like Mississippi, Alabama, and South Carolina are offering, there won't be any big car manufacturers coming here.

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i happen to own one of those "sub-standard" Jettas from the Puebla plant in mexico, and man do you have that right.  I am on recall no. 5 and counting, and have had numerous problems and not happy with the vehicle.  i even called VW usa to tell them that their car was a "piece of 'you know what'" and that they should know that.  Anyways, i remember we went after that chrysler plant to build the vans and lost it to SC as well, no???  what's with SC, i mean i know that no more mini-bottles, but come on>>>  this is FLORIDA damit.

thanks

<{POST_SNAPBACK}>

Jacksonville and Charleston lost the plant to Georgia (Savannah), which in turn lost it when Daimler/Chrysler shelfed it. The state of Georgia bought the site and was going to give it to Daimler/Chrysler. They still own it, so no doubt they will be trying to get VW or Toyota to pick that site. I don't remember what Georgia paid for the site, but it was millions.

Losing the plant was a factor in the incumbent SC Governor losing his race in '02. Interestingly enough, the GA governor lost that year too, even though the plant was still a go at that point.

Until the State of Florida offers the type of incentive money that other southern states, like Mississippi, Alabama, and South Carolina are offering, there won't be any big car manufacturers coming here.

<{POST_SNAPBACK}>

You are absolutely right Lakelander. I'm guessing that since JAX made the short list with Chrysler, that FL was at least competitive in it's bid. I think I read that the state was ready to spend about $100 million for it. One issue was the widening of Chaffee-Brannon road (or is it Brannon-Chafee?). I seem to remember that Peyton or Jim Horne or someone was trying to shift projects around so that the widening could start sooner. I haven't heard anything lately though.

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I heard on Channel 7 a few days ago that VW had considered moving here but they have decided against it. They will instead import their cars from Mexico.

<{POST_SNAPBACK}>

I haven't found this item on the Channel 7 website, but I assume a new VW plant is out for the US.

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Probably not much remembered or known by the forumers here, but this will be VW's second attempt to open a manufacturing facility in the United States.

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Metro,

Wonder if VW is considering it's original NA manufacturing center of Metro Pittsburgh to set up shop once again. :thumbsup:

<{POST_SNAPBACK}>

My guess is they will remain in the South. Less problems with unions since most are right to work states. There is another thread in the Carolinas section where VW is considering a site near Columbia. (mainly because of incentives and fellow German manufacturers BMW and Diamler build vehicles in the state)

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