By on April 9, 2012

Rumors of Audi starting U.S. production have been floating around for a while. Tennesseans in Chattanooga had hoped  Audi would move in with Volkswagen. These hopes have been dashed over the weekend. Germany’s Spiegel reports that Audi will get its own plant in Mexico.

A plan to produce a new generation of Audi’s Q5 sport-utility vehicle from 2015 in Mexico will be presented to Volkswagen’s supervisory board at its next scheduled meeting on April 18, says Der Spiegel. If approved (which is very likely,) production could start in 2015, the magazine said.

Blaming an (unlikely) UAWification for Audi’s decision to build in Mexico is cute spin, but it is spin nonetheless. Until recently, top brass in Wolfsburg had argued to go Chattanooga. Ingolstadt brass was against it. Volkswagen insiders know that “Audianer” try to do their own thing whenever possible. And it looks like it has been made possible again.


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24 Comments on “Audi Hecho En Mexico...”

  • avatar

    As a citizen up in the rust belt where we literally have vast city blocks of old warehouses and boarded up homes, it boggles my mind how our civic leaders have been unable to score some of these new factories from Honda, Hyundai, Kia, Volkswagen/Audi. For areas like where I am the only question leaders should be asking is: “Dr. Winterkorn, how many city blocks would you like razed to accomodate the new factory?”

    • 0 avatar
      Dirk Stigler

      Well that’s the problem. They don’t ask that. They ask instead “how many top-dollar UAW jobs will you bring, and by the way, give us a ton of money for other unrelated improvements to our city, and oh hey, you get to deal with the state and Federal regulatory apparatus’ incredible hostility to business on top of it all!”

      You can argue fairness and human dignity all you want, but the bottom line is that non-union southerners and Mexicans will do at least the same quality work for less money, and their governments are much friendlier to business, including running interference with the Feds. As long as the UAW and northern politicians keep their fingers in their ears on those issues, the rust belt will continue to rust. It kills me, too, but there it is.

    • 0 avatar

      Our “fearful” leaders can only see as far as the next election. Most of them are too concerned with padding their pension(s), their legacy, a book deal and their next “public servant” postion.

      Planning for the next generation is not on their radar. (Unfortunately)

    • 0 avatar
      George B

      Manufacturers avoid urban areas in both the North and the South. However, they will build new plants in rural areas of Indiana. Ohio has also attracted some manufacturing to rural areas away from union strongholds.

  • avatar

    Did Audi completely miss the whole thing where the biggest consumper product company on the planet (Apple) is getting teh crap beat out of it for building iPads in Chinese sweat shops?

    So now Audi, in their infinite wisdom, is going to try and sell a Mexican made Q5 against a US made BMW X3 to the most brand concious demographic in the country: Soccer Moms. BMW will be waving the stars-n-stripes as a marketing tool, and Soccer Moms all over the country will rejoice at the opportunity to make up for the sin of buying a Chinese iPad.

    • 0 avatar

      I disagree. I think most people don’t care where their thing is made, especially most women, and especially soccer moms. Their attention is focussed elsewhere.

      Most luxury cars are leased anyway. Even if BMW touts their US assembly operation, everyone still knows it’s a German car. And isn’t the X3 assembled by Magna International, a Canadian company?

      Apple is also currently the most valuable corporation on Earth.

  • avatar

    As disconcerting as it is to see good jobs go to Mexico vice the US or Canada, the question must be asked as to why this is happening. Is it just economics? Is it just the UAW/CAW? Or is there a deeper problem? These questions need to posed to our political leaders, and they better damn well have good answers. The consumer also needs to asked himself or herself why they prefer cheapness over quality. The Walmartification of our nations is very worrisome to me. I fear for the future of the US and Canada.

    • 0 avatar

      My understanding is that labor laws convinced the likes of BMW, Mercedes, Volkswagen, Kia and Hyundai to locate down south. Being a Clevelander, I wouldn’t be surprised if there were lots of back room deals and handshakes that were required in order to do business here as well.

      • 0 avatar

        Supply-chain management and currency volatility convinced them to move to North America, and right-to-work (a misnomer of a term if I ever heard one, but “right-to-be-fired-on-a-whim” doesn’t play as well) allows them to avoid collective bargaining, grievances or suchlike.

        But yes, it’s all a negotiating process, and very much an employer’s market when it comes to this kind of work. Personally, I think facilitating a race to the bottom is not good for social stability, but that’s just me.

      • 0 avatar

        psarhjinian – I agree with you on the race to the bottom, but knowing how difficult it is to conduct business up here in Cuyahoga County, I wouldn’t be surprised if the vast majority of the reluctance to locate up here was due to unions and the incredibly frustrating way the county and local governments work around here (ie: payola requirements to do business).

        Cleveland has so much available real estate, has an excellent transportation network, excellent access to parts suppliers, an extraordinarily eager blue collar work pool and an incredible cost of living/quality of living balance (top hospitals and universities, arts & culture, etc.).

        As I said, areas like Cleveland at this point should be asking one thing and one thing alone: “What will it take for you to locate here?”. 3,000 decent paying jobs would go a long way in this town.

    • 0 avatar

      The right to be fired is a common condition known as “reality.” If someone wants guaranteed lifetime employment, then they need to find a skill set beyond screwing cars together. The UAW has not protected employment for anyone other than the heads of the union.

      As for social stability, there absolutely is a depressing race to the bottom in this country. The undisputed winner is Detroit.

  • avatar

    As someone who has worked in the auto industry for 20 years, I have the unfortunate opinion that it is impossible to build the best quality vehicles with American assembly line workers who have years of seniority with the Detroit 3 automakers. I hate to say it but it’s true.

  • avatar
    Pastor Glenn

    A lot of the issues revolve around right to work states having more freedom (for now) than states in the east, northeast and west (which mandate union involvement for larger businesses, for all intents and purposes).

    Despite the fact that Indiana just became the latest right-to-work state, the Federal Government administration currently in place is – to put it mildly – very anti-business and pro-alphabet-soup-agency.

    With business conditions in the US as they are right now, anyone would have to be insane to start a business, to be honest. Especially in places where the word “business” is considered a bad word – or something akin to a new “mark” for bloodsucking leeches to use to get “free” money out of to redistribute (i.e. institutionalized theft by government on behalf of their dependents).

    Sorry if the truth schmartz….

    • 0 avatar

      “With business conditions in the US as they are right now, anyone would have to be insane to start a business”

      You’d be insane to start a business—especially in manufacturing something as expensive as an automobile—because there’s no demand, and there’s no demand because a lot of people aren’t making much money and have no real expectation of income stability.

      But yes, it’s all about regulation** and nothing to do with consumer confidence. Nothing at all.

      ** never mind net regulatory interference and corporate taxation has been weakening yearly since Reagan, SOX or HIPAA excluded.

  • avatar

    My prognosis: not good. Mexican built VWs do not have a reputation for being reliable. Audi is doing a lot better in terms of quality than they were 10 years ago, but their reputation still haunts them. A bunch of junk Q5s will lead customers to abandon them for X3s in a hurry.

    • 0 avatar

      Let’s be careful about wading into the “built in Mexico = junk” thread. I’m not so certain it has as much to do with the Mexican assembly as it does have to do with the quality of the components going into those vehicles. Take the MK IV Jettas: the majority of the failures were in sensors and components, not from manufacturing mistakes or misassembled parts.

      • 0 avatar

        I was pointing more towards specific problems that VW has had in Mexico, not at Mexico as a whole. My girlfriend’s Milan was built in Mexico and has been extremely reliable.

        I’d say the same about those US built Nissan Titans, Qwests, and Pathfinder Armadas from a few years back that were all trash. Obviously we know how to build cars in the US, but Nissan’s plant did not.

      • 0 avatar

        I’ll be clear here. I had a 2010 Jetta wagon built at the Puebla plant. in the first 10 months of ownership, the dealer found nine (9) instances of assembly error. Not design error, not robot error, real hands-on assembly error in the form of bent electical pins at hand-plugged connectors (those were a peach to find) misaligned doors and windows that never should have made it past the first QC checkpoint, LOOSE BOLTS(!!) in the subframe, and that’s just to start. The car was carelessly assembled to the point that there was no 11 month of ownership for me. I have never had such problems before or since with VW/Audi products. the Puebla plant is just terrible.

      • 0 avatar

        I’m going to jump on the German Company + Mexican Labor = FAIL bandwagon here. I’ve heard many horror stories of assembly error on the Mexican built Freightliners.

    • 0 avatar

      What about all those problematic European-built Passats and Touaregs? VW’s problems don’t arise from Mexico.

  • avatar

    Interesting. If it’s sold here, it won’t be the first in its segment to be built in Mexico (SRX). Mercedes, however, has several plants in Mexico that make everything from commercial trucks to the S-Class, yet we still get our MBs from Germany or Alabama.

    Of course VW is bolder, having already sold countless Slovak-built Touregs and Q7s at luxury prices.

  • avatar

    Most of the people who buy the Q5 would not know it is from Mexico, they would assume it is from Germany, why? It has to do with the dealership shopping experience and not the actual VIN ID.

    And that’s the answer the VW board will give to their share holders when they are being ask would American buy a Mexican build Audi.

    While many GM products are actually made in the USA, people usually assume they are from Mexico anyway. Again it is that dealership shopping experience!

  • avatar

    The reason Mexican immigrants to the US are being demonized is not because they won’t work. It is because they will work much harder and do a better job than US citizens. Severn years ago I had a room built onto my home in south Alabama. The builder used an all Mexican crew. He told me that they simply did a better job than local crews. The work was done on time and under budget. Since than, I have retired and moved to Mexico. Now I see how hard people will work. Every morning, my neighbors are out sweeping the street if front of their homes. The litter on the road is picked up. Everything is clean. A Mexicano can do anything a UAW member can do, except get paid $28.00 per hour.

  • avatar
    bill mcgee

    The problem is more if you live in one of the cities that are now populated with such a large amount of illegal Hispanics that the wages of most jobs haven’t held up with inflation , even most professional ones . And many jobs that don’t pay all that well require that you be bilingual . And a good work ethic combined with a willingness to work for cheap and claim that you know how to do everything whether you do or not and a spotty command of English doesn’t necessarily result in fine craftmanship . At least there are an endless amount of taquerias .

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