Foreign Automakers Cut & Run - Will VW Hold Steady?

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As the debate continues over the status of a federal bailout for the Big 3, several foreign automakers plan to cut production at several area plants. Toyota announced Monday that it will delay production of its Prius Hybrid at its Tupelo, Mississippi facility. The Tupelo plant is still under construction and plans for completing the facility will continue. Volkswagen plans to discuss cost-cutting measures on a Thursday conference call. Forbes reports:

In an article to be published on Monday, the magazine said Volkswagen was reviewing production plans for its factories in Chattanooga in the United States, in Pune, India and Kaluga, Russia. 'The company is discussing which models could be put on ice or cancelled altogether in the future,' the magazine cited a source as saying. Volkswagen now expected the slump in the automotive industry in important markets to last until 2010, the source said.

Industry analysts predict that global auto sales will drop by 20% in 2009, though Volkswagen expects to sell only 10% fewer vehicles next year than in 2008. VW reps are adamant that plans for the Chattanooga assembly plant will not be affected:

“There has been no change in plans whatsoever with the Chattanooga facility,” spokeswoman Jill Bratina said. “We are continuing to move forward with suppliers and are planning for a groundbreaking in early January.”

Volkswagen is expected to suspend production at its main Wolfsburg plant from Dec. 18 to Jan. 11 in reaction to a weakened global economy. Steve Leach, city public works administrator, told the Chattanoogan that "steps continue to be taken to transfer the [Enterprise South] site to Volkswagen."