NEW YORK--A highly anticipated decision on whether Volkswagen AG
will make a new sport-utility vehicle in the U.S. could come within
the next several months, the head of the auto maker's American
operations said on Wednesday.
The move has been complicated by a legal battle involving the
United Auto Workers union and a February vote by workers at
Volkswagen's Chattanooga, Tenn., plant to reject the UAW as their
legal representative.
"I think it will be pretty soon" that the SUV's production
location will be announced, Volkswagen's top executive in the U.S.,
Michael Horn, said on Wednesday at the New York Auto Show. He added
he is confident the decision won't drag on beyond 2014.
"The last financial calculations are being done," he said.
Volkswagen badly needs a midsize SUV to jump-start its U.S.
sales, but has hesitated to reveal a production plan while the
union issue is unclear, people familiar with the company's thinking
have said.
The union battle is scheduled to resume on Monday, at a hearing
in Chattanooga before the National Labor Relations Board, although
the UAW has asked to delay the session.
Volkswagen's difficulties stemming from the delayed SUV decision
were underscored at the New York show, where Mr. Horn introduced a
station-wagon version of the VW Jetta. He said it could be an
alternative to an SUV, although many American consumers steer clear
of station wagons.
Meanwhile, rival auto makers were charging ahead, presenting new
vehicles that will be made in their own U.S. plants staffed by
nonunion workers.
Nissan Motor Co. showed off its redesigned version of its Murano
SUV, which was previously made in Japan but will now be made in
Canton, Miss. The shift to Canton enables Nissan to make the
vehicle close to its customers, reduce its exposure to
foreign-exchange rates and take advantage of competitive labor
costs, José Muñoz, the chairman of Nissan's North American
operations, said in an interview.
He said the company wants 85% of the vehicles it sells in the
U.S. to come from North American plants, but also added that
"Canton is competitive on costs."
The UAW has targeted an organizing drive at the Canton plant but
hasn't built enough support to call for the kind of election that
took place in Chattanooga.
BMW AG introduced a new car, called the X4, that is a cross
between an SUV and a sports car. It is assembled at a plant in
Spartanburg, S.C. BMW invested about $1 billion in the last two
years to prepare the plant to make the X4, and is spending an
additional $1 billion to expand the plant to make yet another SUV,
called the X7, due in two to three years.
Similarly, Toyota Motor Corp. unveiled an updated version of its
Camry sedan, which is made in Georgetown, Ky. Toyota previously
imported some Camrys from Japan but now all Camrys that are sold in
the U.S. are made in Kentucky. It is also expanding the plant to
begin making a Lexus ES sedan that is currently imported from
Japan. Lexus production will begin in Georgetown next year.
Toyota's U.S. plants "are not only competitive on costs but the
quality is the finest in [our] system," said Bob Carter, senior
vice president of the company's U.S. sales arm.
In the last five years, the U.S. auto plants have emerged as
tough competitors in the global market. U.S. labor costs are lower
than in Germany and Japan, exchange rates remain favorable and the
U.S. auto sales are rising.
Volkswagen sought to take advantage of those conditions when it
built the Chattanooga plant in 2011, but last year it opened talks
with the UAW, in the hope the union could become a partner in a
works council--a committee of workers who negotiate with
management.
But workers rejected the union by a vote of 712-626. The UAW
then filed a complaint with the NLRB, alleging that anti-UAW
comments by Republican lawmakers improperly influenced the vote. It
focused mostly on a statement by Sen. Bob Corker (R., Tenn.) that
an announcement that the new SUV would be made in Chattanooga would
come shortly, should the vote go against the union.
Since then, a Nashville TV station has unearthed emails
allegedly showing Gov. Bill Haslam offered VW $300 million in
incentives to entice VW to make the SUV in Tennessee, but wanted to
see how the vote turned out before giving it final approval. In the
wake of that news, the UAW asked to delay Monday's hearing. It has
also filed subpoenas to compel the governor, Sen. Corker and 17
other individuals to turn over any emails or other documents they
have related to the union.
Write to Neal E. Boudette at neal.boudette@wsj.com
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