Volkswagen of America Inc. is considering a move from its longtime local hub north of Detroit in Auburn Hills, Mich., two sources familiar with the matter told Crain's Detroit Business, an affiliate of Automotive News.
A decision is not final, said the sources, who spoke on the condition of anonymity because they are not allowed to talk to the media.
The German automaker is exploring not only a lease elsewhere in Oakland County, but also developing a large new building. It could also remain in its existing property or move elsewhere in Auburn Hills.
At stake for the city is 1,000 or more jobs in customer relations and after-sales support, as well as engineering and environmental functions. It is also home to the automaker's interface with U.S. regulators through its engineering and environmental office. The company occupies all of the roughly 365,000-square-foot building at 3800 Hamlin Rd., formerly the company's North American headquarters, which moved to Herndon, Va., in 2008.
A spokesman for Volkswagen of America said the company was in the preliminary stages of exploring its options on the leased facility in Auburn Hills.
Auburn Hills Mayor Kevin McDaniel said he is confident the automaker will stay in his city.
"We are aware that Volkswagen has experienced impressive growth that may require them to expand their current operations here in Auburn Hills," McDaniel said in a statement to Crain's Detroit Business.
"Volkswagen has been in our community for nearly 30 years and it is certainly our goal for them to remain here among all of the automotive industry giants. We stand ready to assist them at their current location or to help them grow at one of the readily available high-profile sites in our community that will continue to provide them with easy access to all of southeast Michigan. Considering our long-standing cooperative relationship with the company, we have no reason to believe they would choose anywhere but Auburn Hills."
Crain's Detroit Business reported in 2011 that VW was renewing its lease in the building and putting $19.4 million in capital improvements into it. The property is owned by MAK Real Estate Investment Inc., which is controlled by Kuwaiti billionaire Fawzi Mohammed Al-Kharafi.
It was built in 1991.
This isn't the first time VW has considered exiting the building. In 2011, it explored a move to Troy into what at the time was known as Baluster Park, today the North Troy Corporate Center.
It ultimately decided to stay in 3800 Hamlin after a series of tax abatements.
Kirk Pinho is a reporter for Crain's Detroit Business. Larry P. Vellequette is a reporter for Automotive News.