Tennessee plant in lead to build new VW crossover - U.S. VW exec

DETROIT, Sept 17 Tue Sep 17, 2013 3:11pm EDT

DETROIT, Sept 17 (Reuters) - Volkswagen AG is leaning toward building a seven-passenger crossover utility vehicle at its plant in Chattanooga, Tennessee, rather than at its facility in Puebla in Mexico, a U.S. executive of the German automaker said on Tuesday.

Marc Trahan, executive vice president for U.S. quality, said cost will be the primary factor in the final decision.

The decision will be made by the end of the year, he told reporters after a speech to the Automotive Press Association in Detroit.

Trahan said the Chattanooga plant, which now builds the compact Passat sedan and opened in 2011, was made to produce more than one vehicle.

Adding another vehicle to the plant's output is a given, he said. "It's not a question of if, it's only a question of when and what," he said.

While he said VW has not yet made a decision, when asked which of the two plants was in the lead to build the seven-passenger crossover utility vehicle, he said, "Chattanooga."

Trahan would not say whether an effort by the United Auto Workers union to represent the 2,500 workers at Chattanooga would influence the final decision.

Volkswagen has told its workers in Chattanooga that it is in talks with the UAW regarding placing a German-style worker representation model, which would include both blue- and white-collar workers, at the plant. The issue is divisive among the workforce, and many Tennessee politicians have been vocal in their opposition to the UAW being involved at Chattanooga.

The UAW has said that more than half of the workers at the plant have signed cards indicating support for the union.

The seven-passenger crossover vehicle is to be built on the same basic modular platform as the VW Golf and Jetta sedans.

The vehicle, named the "Cross Blue" concept when it was shown at the Detroit auto show last January, would be sold in the U.S. market by either 2016 or 2017, Trahan said.

A crossover has SUV-like style and utility but rides and handles more like a car than a truck. Automakers are rolling out more crossovers in every size and price segment as consumers, attracted by the flexibility and functionality afforded by CUVs, continue to move away from more traditional body styles such as sedans and wagons.

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