THE VOLKSWAGEN VOTE

VW to build SUV in Tennessee, Corker reasserts

Corker: "Volkswagen knows what the offer is."

Photo credit: REUTERS
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CHATTANOOGA -- U.S. Sen. Bob Corker today doubled down on his claim that Volkswagen AG will build a new mid-sized SUV at its assembly plant in Tennessee now that the UAW has been turned away.

Corker, a former Chattanooga mayor who played a pivotal role in luring Volkswagen to Tennessee in 2008, made that statement earlier this week in a last-ditch effort to persuade VW workers to not vote for the union during elections Feb. 12-14.

Speaking to reporters today, a day after the UAW's defeat was announced, Corker said he remains confident in what he has heard from within the company.

"I stand by my comments," he said, predicting an announcement will come soon. "History will show whether there was truth to those … I would have never made them if I hadn't had assurances that everything I said was 100 percent factual."

Corker said his staffers spoke today with VW and he has scheduled a phone call with VW later this week.

For the past year, Volkswagen executives have been building the business case for expanding the Chattanooga plant's capacity from about 150,000 units per year to 250,000 units per year to lower its per-unit costs and expand the brand's U.S. product lineup.

VW's supervisory board, which is scheduled to meet Feb. 21, must approve all major investments, including any expansion of the Chattanooga factory.

The company insisted in the lead-up to the UAW election that union representation would have no bearing on whether the Chattanooga plant would be expanded to build another product.

"There is no connection between our Chattanooga employees' decision about whether to be represented by a union and the decision about where to build a new product for the U.S. market," Frank Fischer, the CEO of Volkswagen's Chattanooga operation, said in a statement earlier this week.

Of all the products that could go along with a plant expansion, the SUV has emerged as the most likely fit because it would be primarily a North American product.

Mexico, the other country vying for the SUV, offers an advantage for cars sold globally because it has fewer tariffs on exports than the United States.

Volkswagen has been soliciting subsidies from both Tennessee and Mexico.

State and local lawmakers in Tennessee offered VW nearly $580 million in incentives in 2008 to secure the construction of the plant.

Corker said in a brief interview with Automotive News today that Tennessee officials have clearly stated what incentives they can provide this time around.

Said Corker: "Volkswagen knows what the offer is."

You can reach Gabe Nelson at gnelson@crain.com.


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