Commonwealth is the No. 3 auto and light-truck producing state
By Mark Green
The Lane Report
While not saying they are actively engaged with Volkwagen officials who announced last week they intend to build a new North American plant, Kentucky economic development officials do note that the state has three certified sites available and that they’ve had success recruiting German firms the past two years.
The commonwealth is the No. 3 auto and light-truck producing state, and expects record vehicle production again in 2014. There are two Ford plants in Louisville, a GM plant in Bowling Green and Toyota’s largest North American site in Georgetown.
“Kentucky boasts a vibrant and thriving automotive industry ecosystem that touches every corner of our commonwealth,” a release from the Cabinet for Economic Development states. “Home to nearly 460 automotive-related manufacturing establishments, Kentucky has become a beacon of industry success. Our state’s workforce is known for building quality products, which can be demonstrated by the recent expansions of Toyota and Ford.
“We’re also blessed with three available certified ‘megasites,’ including the Glendale Megasite in Elizabethtown, which was hailed as the best megasite in the South by a leading national site location magazine. These assets, combined with our central location in the heart of the U.S. ‘auto alley,’ our low business costs and aggressive incentive programs and an overall pro-business environment make Kentucky the perfect location for new and expanding automotive manufacturers.”
Volkswagen CEO Martin Winterkorn told news media the evening before the opening of the North American International Auto Show in Detroit last week that his company intends to build a new North American factory as part of plans to invest $7 billion in the continent over five years to lift annual sales from 600,000 to 1 million.
Gov. Steve Beshear led a state economic development trip to Europe this past September that included stops in Austria, Germany and Spain. To boost economic development leads from European companies, Kentucky opened an office in Hamburg, Germany, in the summer of 2011.
At the time of the trip last fall, state officials said Beshear was following up on several business opportunities that had arisen thanks to the on-the-ground, in-country support designed to develop relationships with European business leaders.
In 2012 and 2013, the state had 14 German auto suppliers announce openings or expansions in Kentucky, according to the Cabinet for Economic Development. These projects resulted in more than 1,000 new jobs and a nearly $380 billion investment.
Volkwagen has a factory in Chattanooga, Tenn., where it has made the Passat sedan since that $2 billion facility opened in 2011. City and county leaders in Chattanooga expect Volkswagen to bring production of its CrossBlue midsized SUV there, according to news reports. Bloomberg News reported that Volkswagen had already chosen Chattanooga over a Mexican plant.
Winterkorn said last week in Detroit that the German vehicle maker plans to bring its midsize SUV to the North American market as soon as it can. VW also intends to design a seven-seater sport utility vehicle specifically for the region as it looks to increase overall U.S. sales, which have seen fast growth in recent years but fell in 2013.
Kentucky would be a logical location for the new North American VW plant. The state-owned 1,550-acre industrial site in Glendale is on Interstate 65 near the Bluegrass and Western Kentucky parkways and has rail connections. It been marketed it as a prime location to vehicle makers for the past decade.
In the company’s news release on the CEO’s comments, Winterkorn said the Volkswagen Passenger Cars brand was today better positioned in the United States than ever before and that production of its new “made in North America” Golf would give the brand a further boost.
Production of the Volkswagen’s successful Golf began Jan. 13 at a plant in Puebla, Mexico, with market launch scheduled for the summer.
“The new Golf features the latest generation of our TSI and Clean Diesel engines as well as electric drive and plug-in hybrid technology,” Winterkorn said, noting that pushing new technology is part of the growth strategy.
In addition to Volkswagen, the company’s brands include Audi, Porsche, Bentley, Bugatti and Lamborghini.
“We have set our goal: Volkswagen Group of America aims to sell one million Volkswagen and Audi cars per year in the U.S. by 2018. We are taking up the challenge – with confidence, total commitment and the necessary staying power.”
Volkswagen Group has almost doubled unit sales in the U.S. since 2008, Winterkorn said, setting a new record of over 600,000 deliveries in 2013.