John Blue Realty

News reports feed VW plant suspense

Monday, July 07, 2008

By GINA HANNAH

Times Business Writer gina.hannah@htimes.com

German magazine says Alabama likely choice, Tennessee is 'Plan B'

For local officials and others waiting to see where Volkswagen plans to build its proposed U.S. assembly plant, this could be the week.

Or not.

Europe's largest automaker is expected to choose a site for its plant by the end of the month, and several trade publications list Huntsville as the front-runner. According to news reports, management will make its formal proposal Tuesday, and VW's supervisory board will vote on it July 15.

Some reports say an announcement could come as late as July 21, when VW shuts down for a three-week summer break.

The new assembly plant would create as many as 2,000 jobs and cost $800 million to $1.2 billion.

Numerous sources say the local site under consideration is northwest of the Greenbrier Road-Old Alabama 20 intersection in a portion of eastern Limestone County recently annexed by Huntsville.

That's a change from a previous tract the automaker was reported eyeing, a Tennessee Valley Authority "megasite" west of Interstate 65 near Athens.

Alabama Department of Transportation survey crews have been working at Greenbrier in the last month or more and have told Times staff that they were getting ready to widen the road.

A TVA megasite in Chattanooga is also reportedly a finalist for the plant. Michigan, which VW said months ago was also under consideration, is now out of the race, according to European news reports.

Rumors and reports have abounded during the past few weeks and continued over the weekend. On Friday, a British metal industry Web site said Huntsville was the favored site, with Chattanooga possibly getting an engine plant in the deal.

On Saturday, Automobilwoche (Automobile Week), citing senior company officials, said Alabama is the likely home of the factory. It said Tennessee has not been ruled out and stands as the automaker's "Plan B" choice.

Automobilwoche said the automaker plans to build a new Jetta compact sedan and a "medium sedan" and could share production with its subsidiary Audi to build its Q5 sport utility vehicle, which is expected to be introduced to the U.S. market early next year.

The report cited Alabama's infrastructure and available work force, as well as the presence of Germany-based suppliers, who moved to the state after Mercedes-Benz built its plant in Vance in the mid-1990s.

If Volkswagen chooses Huntsville, it would be the fourth automaker to build an assembly plant in the state, following Mercedes, Honda (in Lincoln) and Hyundai (just south of Montgomery).

It would also mark the third time the state has landed a large German company: Mercedes chose to build its first U.S. assembly plant in Alabama in 1993, and ThyssenKrupp announced last year that it will build a $4 billion steel plant north of Mobile.

The Mercedes plant has drawn German auto suppliers to the state, including electronics giant Continental, which purchased the Siemens plant in Jetplex Industrial Park last December. Continental has a partnership with VW to produce electronic components for hybrid vehicles.