Monday, July 09, 2007

Report: VW may build North American factory

Associated Press

BERLIN -- The chief executive of Volkswagen AG said in an interview released over the weekend that the German automaker would consider building a factory in North America if the U.S. dollar remains weak against the euro.

Already VW is planning to set up a second administrative hub near Detroit, "to get closer to our customers" there, Martin Winterkorn told the German weekly Focus. Volkswagen confirmed the interview.

Volkswagen AG, based in Wolfsburg, already has a subsidiary, Volkswagen of America Inc., headquartered in Auburn Hills. Last week, Stefan Jacoby was named as president and CEO of Volkswagen of America.

The company hopes to improve sales of its vehicles and increase its share of the highly competitive U.S. market.

"If the dollar exchange rate stays at its present level, we will have to begin thinking about a factory in North America," Winterkorn said.

The company expects to set a new record for vehicle sales in 2007, pushing beyond the 6 million mark, Winterkorn said.http://www.detnews.com/apps/pbcs.dll/article?AID=/20070709/UPDATE/707090391/1148/AUTO01

Volkswagen HAD a U.S. plant at one time, back in the 70's, at New Stanton, PA, on the PA Turnpike south of Pittsburgh, where they built the U.S.-market Rabbit hatchbacks (Rabbit convertibles, back then, came from Germany). Some of you old-time car guys, like me, may remember the plant......I've been by it several times.

Chrysler had given VW the plant in a buisness deal exchange where VW was to supply Dodge and Plymouth with 300,000 1.7L VW-designed 4-cylinder powerplants for the new Omni/Horizon subcompacts (a car that, like the Rabbit of the time that it more or less cloned, had good FWD traction in an age of RWD, but was otherwise a piece of junk). VW got the plant in exchange for the engines, and continued to produce FWD water-cooled vehicles there until they moved production to Brazil and Mexico to take advantage of cheap labor. The air-cooled Beetle, of course, continued to be built in Mexico until just a short time ago.