Trump, Volkswagen, Mexico and Chattanooga
CHATTANOOGA (WDEF) – You can’t blame workers in Chattanooga for closely watching a potential feud brewing between Volkswagen and incoming President Donald Trump.
After all, it could lead to more work here. But not yet.
The President-elect is noisily complaining about the auto industry building products in Mexico and then selling them here in the U.S.
He is threatening a 35% tariff on those autos.
Volkswagen’s plant in Puebla is their largest and most modern outside of Germany, employing twice as many people as they have in all of the United States.
They are making the new Tiguan there, which the company just introduced at the Detroit Auto show on Monday.
The Mexican-made Tiguan and the Chattanooga-made Atlas are the cornerstones to the company’s plans to compete in the U.S. market.
And a key strategy is giving both of the SUVs competitive prices.
But a 35% Trump Tariff would blow that out of the water for the Tiguan.
So far, Volkswagen isn’t flinching.
Unlike some U.S. automakers, they are not shifting production away from Mexico and into the U.S.
At least not yet.
Officials say they want to learn more about the administration’s plans when they take over.
So how does the Trump-VW dance affect Chattanooga?
It could seriously damage the company’s SUV plans for the U.S. And if they fail, the long term commitment to the U.S. could be in the balance.
Or Volkswagen could reverse course and bring even more work to Chattanooga.
So expect Chattanooga to pay attention to this one.