Automakers keep eye on competition
Posted: Tuesday, October 16, 2012 7:00 pm
By: ERIK SCHELZIG Associated Press
By ERIK SCHELZIG
CHATTANOOGA (AP) — Southern states accustomed to luring investments away from the Midwest are casting a wary eye to competition from Mexico.
Tennessee Gov. Bill Haslam was asked at the Southern Automotive Conference last week about what steps are being taken to keep investments from moving abroad, especially in light of a recent decision by German automaker Audi to build its first North American plant in Mexico.
Haslam said Southern governors need to work toward a more regional approach to attracting investment, rather than playing off of each other.
“People realize that the strength of the region is really as important as what happens in each one of those states,” he said.
A recent speech by Jonathan Browning, the president and CEO of the Volkswagen Group of America, apparently weighed heavily on attendees at the conference.
Audi is a Volkswagen subsidiary.
Browning’s speech last week at the Brookings Institution criticized U.S. economic policies and cited Mexico’s trade agreements in Audi’s decision to build its $1.3 billion plant there.
“It simply doesn’t make sense to build in the U.S. if exporting is central to that investment decision,” Browning said, according to a Brookings transcript.
“By choosing Mexico for the new plant, Audi can afford a 10 percent tariff on cars shipped to a host of countries that have trade agreements with Mexico, but not with the U.S.
“So the decision from an economic point of view is fairly clear today. In the auto sector, at the very least, if the North American market can assume the vast majority of production then you can afford to build in the U.S.”