Chattanooga VW In Stiff Competition With Mexico For Production Of CrossBlue, Speaker Says

Thursday, January 24, 2013

The Chattanooga Volkswagen plant is in stiff competition with a much-larger facility in Mexico to produce the new "CrossBlue" SUV concept car unveiled at the Detroit Auto Show, Dr. Guenther Scherelis told members of the Chattanooga Rotary Club on Thursday.

However, the Volkswagen board in Germany must first make a decision on whether or not to proceed with the "CrossBlue," Dr. Scherelis said.

He said that decision may come in about a month, then - if favorable - the plant designation would be in about six months.

If Chattanooga gets the approval, it would double the size of the already huge auto assembly plant at the Enterprise South Industrial Park in Tyner.

Dr. Scherelis said, "Our chances are good, but also other plants have good chances."

He said Frank Fischer, president of Chattanooga Volkswagen, and other top local VW officials are lobbying in Germany for the local site.

He said, "They are off to Germany to lobby for the car. Almost all the time they are trying to get the car here."

Dr. Scherelis said Chattanooga VW has 3,200 employees, whereas the VW facility 80 miles from Mexico City has 18,000. It has been operating since 1964.

He said the Mexico plant has the advantage of free trade agreements. He said local VW officials are hopeful that current talks with yield a free trade agreement between the U.S. and the European Common Market.

The speaker said if approval is given for the CrossBlue that it will then have to go into final design. He said it then may go to market by 2016 or 2017. He said cars now go into production at a much faster rate than in years past. He said in the 1990s it might take eight years from idea to production.

He praised the Volkswagen Academy, saying that business people from around the world are studying the facility. But he said there is still a shortage of highly-skilled workers here, and they must be recruited nationally. He also praised the work ethic and enthusiasm of local workers.

Also, he said Chattanooga needs to draw more suppliers here to cut down on the local plant's logistics costs.

The local plant is turning out 630 cars a day. The total last year was 152,500.

The Volkswagen group passed 550,000 cars sold in the U.S. last year and is aiming for over 600,000 next year. The goal is over 800,000 by 2018.

He said there was a problem with cars here being damaged by hail storms, but a hail net has been installed. 

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