Expanded Production in U.S. Hinges on Trump Trade Decision, Volkswagen Hints

Steph Willems
by Steph Willems

Volkswagen’s sole U.S. assembly plant was spared any fallout from the company’s wildly expensive diesel emissions scandal, but the upcoming North American Free Trade Agreement negotiations could see VW throttle back its future plans for the facility.

The Chattanooga plant, which builds the Passat and Atlas, has seen $900 million in investment over the last couple of years. More models are anticipated, and the automaker said it expects the plant to reach full production by 2020. However, recent threats of an import tax to be levied on German automakers has VW brass in wait-and-see mode before sending any new models or money to Tennessee.

Volkswagen brand chief Herbert Diess made a telling remark outside yesterday’s unveiling of the Arteon luxury sedan in Germany, Bloomberg reports.

“It has been a roller-coaster of emotions over the past months,” Diess said. “We hope that we’re going to have clarity in the next months. It influences investment decisions.”

Diess was referring to rhetoric emanating from the Trump administration, which hopes to redraw NAFTA in a manner that prioritizes U.S. workers and industry. One way it could do that is to levy an import tax on foreign automakers. That would be bad news for an automaker that imports the bulk of the vehicles it sells in the U.S. from factories in Mexico and Europe.

Before any new investment occurs in the U.S., Diess and other top brass want to know the U.S.’s intentions.

Chattanooga took on a larger presence in VW’s global portfolio following the diesel debacle. As a way to boost revenue and sales, the automaker plans to offer new crossover and SUV models to a utility-hungry America. Some of those vehicles, as well as the company’s future crop of electric vehicles, were expected to find a production home in an American plant.

“We will be significantly stepping up our activities in the USA,” Diess said in a statement last November, emphasizing a focus on SUVs. “In a second stage, we will then take our new electric cars to North America.”

Those electric vehicles, which share the same architecture as its I.D. concept vehicles, would appear in 2021, Diess said at the time. NAFTA talk are expected to get underway in August.

[Image: Volkswagen]

Steph Willems
Steph Willems

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  • Yankinwaoz Yankinwaoz on Jun 01, 2017

    What the hell is up with that photo? Those are not Appalachian mountains. Looks like SoCal mountains. Probably up near Valencia just north of LA. Weird that they put a wall with the name of the town in Tennessee where they have their US plan in the middle of SoCal.

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    • Redapple Redapple on Jun 02, 2017

      @joeaverage I m been inside too. You are correct sir!

  • Tod stiles Tod stiles on Jun 02, 2017

    THANK YOU MR PRESIDENT! WE'LL SHOW THOSE GERMANS WHO WON THE WAR!

  • Dartdude The bottom line is that in the new America coming the elites don't want you and me to own cars. They are going to make building cars so expensive that the will only be for the very rich and connected. You will eat bugs and ride the bus and live in a 500sq-ft. apartment and like it. HUD wants to quit giving federal for any development for single family homes and don't be surprised that FHA aren't going to give loans for single family homes in the very near future.
  • Ravenuer The rear view of the Eldo coupe makes it look fat!
  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
  • JTiberius1701 Middle of April here in NE Ohio. And that can still be shaky. Also on my Fiesta ST, I use Michelin Pilot Sport A/S tires for the winter and Bridgestone Potenza for my summer tires. No issues at all.
  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
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