By on November 3, 2008

Ask the average American why they oppose the recent financial-sector bailout, and a devalued dollar will likely rank high in their answer. But perhaps what’s being missed in the hysteria is that a weaker dollar provides America with an opportunity to rediscover something we used to be pretty well known for: making high-quality products and selling them on the world market. A weak dollar means cheaper exports, and with Euro-zone costs as high as they are, European manufacturers are most likely to take advantage of this. Volkswagen has already moved on creating an American manufacturing base, with a new factory under construction in Chattanooga, TN. And now it seems that VW’s sister brand Audi is looking to get in on the action in hopes of capitalizing on its hot hand and doubling US sales by 2015. VW CEO Martin Winterkorn says its not a question of “if” anymore, but “where” and “what.” “Perhaps in Chattanooga, but we have no decision yet,” Winterkorn tells Automotive News [sub], who notes that the $1b VW plant can expand to an extra 100k production capacity if need be. This means 150k yet-to-be-announced mid-sized VWs and 100k unnamed Audis could be built in Chattanooga each year. “The new mid-sized (VW) which we want to build in America, we want only to sell in America,” says Winterkorn, who expects a decision to come next year. “(Audi) should have the right product for the market.” Given VW’s long history of saddling America with sub-standard cars that it can’t won’t sell elsewhere, this isn’t encouraging. Unless, of course, you happen to be looking for manufacturing work.

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9 Comments on “Audi Angling For American Production?...”

  • avatar

    The whole weak/strong thing is a misnomer anyway.

    Canada likes being “weak” because it means its very attractive to do business in Canada. Which isn’t really too weak really.

  • avatar

    You are aware that the “financial bailout” has pushed the dollar’s value up — back to where it was in 2003 — and given the problems with the Euro it is likely to stay there.

    And the automakers bailout only includes people who have been building cars for 20 years in the US (2.8+Honda) and Honda was only included to make sure it stands up to a WTO lawsuit.

    So while it is great the VW is thinking about building cars here, I suspect it has nothing to do with currency values.

  • avatar

    Ask the average American why they oppose the recent financial-sector bailout, and a devalued dollar will likely rank high in their answer.

    Don’t you think that this is placing far too much trust in the average American’s financial knowledge?
    Especially considering that the dollar has been going up anyway, against all structural indicators.

    Regarding the rest of your article, the dollar has been low recently, and that is certainly a big reason for all those plants to be built in the US.

  • avatar

    @Snabster: Ed is right, in a way. The building of the Chattanooga plant actually HAD something to do with currencies. Until July this year, the Euro went up, and up, and up, making imports to the US expensive, or a money-losing proposition.

    The precipitous drop of the Euro is a recent phenomenon, it made a sharp turn in July and dropped like a rock. Parity with the greenback is not out of the question.

    Alas, the wheels for the Chattanooga plant had long been in motion. And darnit, exactly in July, Chattanooga was chosen as the location of the long plannned plant. As if on cue, the Euro went where VW did go: South.

    VW doesn’t have much luck with currencies (maybe they’ll learn from Porsche.) When there still was a Deutschmark, and it stood at 1.70 to the dollar, a VWoA manager said to me: “The currencies don’t worry me. In my budget, the dollar is at 2.30.”

  • avatar

    I still wonder if it was worth $600 million in TN money to build that plant there.

  • avatar

    VW had plant in US (PA) in early 80’s. If my memory serves me right it was closed due to quality issues and production moved south of border. Quality of course jump as we know (and perhaps already hard landed)

  • avatar

    So, who’s the guy in the picture? I rarely if ever comment on peoples looks, but I can’t take people seriously that looks as smug as he does. He needs to take himself less seriously, perhaps even grow a sense of humour. But first, he needs to remove that pole somebodys shoved up his ass.

  • avatar

    @ingvar: That would be Dr. Martin Winterkorn, currently CEO of VeeDub, and by many regarded as the man in Piech’s shadow. After a rather low-key career in refrigerators, Winterkorn’s meteoric rise at Volkswagen coincided with Piech’s arrival at the helm of Volkswagen. Winterkorn became infamous for heading VW’s Quality Assurance department while their quality was in the tank. My memory fades, but for a while he may have been responsible for technical development and QA at the same time. Talk about putting the fox in charge of the chicks. (Credit where credit is due: Quality improved.) As Piech retired from the CEO post in 2002 to become Chairman of the Supervisory Board, Winterkorn was made head of Audi. And when Piech finally ousted the then CEO Pischetsrieder, who got the job? Winterkorn.

    In a company that has more Doctors and Professors than the John Hopkins Hospital (it’s an Austrian thing, no upstanding Austrian will be content with his name alone, it must be prededed by a title! Ferry Porsche was Austrian, Hitler was Austrian, Piech is Austrian, Porsche is Austrian, did anybody notice, hello – VW is being taken over by foreigners, again! But I digress in excess:) In a company that has more Doctors and Professors than the John Hopkins Hospital, Winterkorn can’t stand behind. In addition to his rightfully earned PhD in metallurgy, he’s also honorary professor of universities in Budapest, Dresden, and Shanghai. We understand: Volkswagen has factories in Shanghai and Dresden. But Budapest? Signs of things to come?

    And as for the rectal vertical implement: Us Germans are genetically coded to have what looks like a stick up the ass. No worry: It’s natural. Ever wondered about the origin of “ramrod straight?”

  • avatar

    Nice explanation, Mr Schmitt! Very Nice!

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