Audi: On Second Thought, We'd Prefer A Plant In Mexico

Edward Niedermeyer
by Edward Niedermeyer

It was quite a coincidence when, just last week, Audi restated its interest in US production facilities on the same day that the UAW announced it was in talks to possibly organize VW’s new Chattanooga plant. At the time we noted that

With Audi execs insisting on the need for more US production capacity, a UAW win in a Volkswagen vote could have serious implications for the firm’s future expansion.

Turns out, it didn’t even have to come to a vote. Just over a week after CEO Rupert Stadler insisted that “It is totally clear that we need new production capacity in the U.S,” Audi has suddenly decided that things look nicer in union-free Mexico. Automotive News [sub] reports that Stadler wants a new Mexican plant to build the Q5 SUV, but notes that

it was still unclear if Stadler would have his way in the face of opposition from some of Volkswagen’s top managers, who wanted Audi to make use of the new VW plant in Chattanooga, Tennessee.

Did the UAW’s sudden announcement that it was in talks with VW’s global works council about organizing Chattanooga have anything to do with the decision? AN [sub] won’t say, but the timing can’t be ignored. Audi’s US production may just have been the first victim of the UAW’s transplant organization campaign.

Join the conversation
7 of 70 comments
  • GS650G GS650G on Jul 21, 2011

    For how long will Audi ride their reputation as a fine German automobile once they produce the bulk of inventory in third world countries?

    • See 1 previous
    • Wsn Wsn on Jul 21, 2011

      Audi has been building very cheap A6 in China for more than a decade already and I still see plenty of Audi in North America.

  • Fusion Fusion on Jul 21, 2011

    Working ok with the TT and quite a lot of engines and components, isn't it? Also, I am not sure if there really is a "second thought". The german media reported that Stadlers (first) stated opinion was that more capacity in North America is needed. Automotive News reported that more capacity in the US is needed. So one way or another, there must be a translation error. The original article that Autonews is translating this time around also never states anything about plans for an Audi plant in the US, it is all about a separate plant in Mexico or combining in Chattanooga. I highly doubt the UAW plays much of a role in this decision, seeing how no Transplant so far has had any trouble with them. I'd guess the VW topmanagement wants to use their plant, while Audi would like to keep things separate (as they have traditionally been - Audi and VW don't really share plants). Also remember that when Spiegel Online or Manager Magazin (basically the same) quotes from "unnamed management circles", this really can mean anyone in the company, not neccessarily someone involved in or even knowing about the decision itself...

  • Sgt Beavis Sgt Beavis on Jul 21, 2011

    Dear Audi, Just build you plant in Texas or another right to work state where most of the workers hate unions to begin with. Alabama is a good choice too.

  • Darkhorse Darkhorse on Jul 21, 2011

    There seems to be a never ending diatribe on TTAC regarding the UAW vs Right To Work US states vs Mexico. What is the actual percentage of production cost of a new car for human labor? Is it so large that paying workers in pesos makes the production cost worth moving to Mexico? Someone educate me. I also don't understand why a human even needs to be involved in making a car given the capabilities of modern robotics.