Volkswagen mulls South for next auto plant

The South offers automakers ample highway and rail systems and proximity to the large market of U.S. consumers. But its main attraction: Existing auto plant workers, even those who are victims of other industries exporting jobs, have rejected overtures by the United Auto Workers.

"Foreign-owned automakers have been a tough nut for the UAW to crack, and the South is particularly difficult," said Harley Shaiken, a University of California, Berkeley, professor who specializes in labor issues.

"That is without question an important part of their location decision," he said.

Volkswagen's plant will be part of the company's strategy to increase its presence in the U.S., where the maker of the Jetta, Golf and Beetle holds just 2 percent of the market.

VW executives have narrowed their site options to Alabama, Tennessee and Michigan. All three states are offering financial incentive packages. The automaker's representatives and economic development officials won't discuss the site search.

A Tuesday meeting of the company's management board in Frankfurt, Germany yielded no decision on where to build. Volkswagen's supervisory board, the equivalent of a U.S. board of directors, is to meet July 15, with an announcement expected soon afterward.

Industry executives and analysts say there is plenty of room in the South, where foreign auto assembly plants have been locating since Nissan Motor Co. set up shop in Smyrna in 1983.

Analysts say the region can easily provide another 2,000 skilled workers, as can Michigan, where there are autoworkers idled by cost-cutting American companies.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said auto plants can locate within 40 or 50 miles of each other but "10 or 20 miles, that is too close," Cole said.