Volkswagen unveiling two-door Elise fighter in LA, new sports car

Over the past five years, Volkswagen has continued to tease us with sports car concepts that never seem to come to fruition. Back in 2003, VW unveiled the Concept R in Frankfurt to critical acclaim and two years later, the wraps came off the EcoRacer, proving that the automaker was still kicking around the idea of a lightweight, affordable roadster for the masses.

In the interim, VW had two similar concepts that never left the studio, but when the Los Angeles Auto Show rolls along later this year, a new mid-engine coupe will be revealed, and this one actually has a shot at production.

According to Autocar, this newest concept aims to be a budget alternative to the Lotus Elise, balancing performance and fuel economy in a low-cost package. Sources suggest that the coupe will feature either a 168 hp, 1.4-liter TSI gasoline engine or a 125 hp, 1.6-liter TDI mounted amidships and sending power to the rear wheels via a seven speed DSG gearbox. If and when the production version debuts in 2011, the coupe's curb weight is pegged at just over 2,200 pounds, allowing it to run to 60 in under seven seconds while still returning over 55 mpg.

If the project is given the green light, the same architecture that underpins the VW variant could form he basis for the oft-rumored and continually denied Audi R4. And with Porsche's stake in V-Dub, that means a 914 successor is just a badge and prayer away.

Volkswagen mulls South for next auto plant

If Volkswagen AG decides to build its U.S. assembly plant in the South, the German company will join other foreign automakers that are increasingly turning the region into a hotbed of car manufacturing.

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.

He said automakers "don't want to be competitive with someone who is a high-paying employer."Honda spokesman Ted Pratt said Volkswagen or anybody coming into the area "will find what we found: a great quality of life and a great work force."Honda set up operations in east Alabama in 2001, and the assembly plant Kia Motors Corp. plans for West Point, Ga., will be about 100 miles away. Two likely Volkswagen plant sites in Chattanooga and Huntsville, Ala., also are about 100 miles from the Honda plant.

Pratt said the plants seem "spread apart far enough so we are not pulling from the same labor pool."Spokesmen with Nissan Motor Co.'s North American plant in Nashville, BMW AG's plant in Greer, S.C., and Honda Motor Co.'s Lincoln, Ala., factory also said their companies have no reason to worry about the region becoming crowded with automaking.Nissan spokesman Fred Standish said competitors' locations haven't factored into Nissan's decision-making.Cole said a U.S. location is more competitive than ever in the current global economy and compared to Mexico, U.S. workers are better educated.

Volkswagen's only North American plant is in Puebla, Mexico, where 9,600 union workers staged a five-day strike in 2006 for better wages and benefits."They want an educated, motivated work force," Cole said.The issue with unions isn't wages. Auto production line work in the U.S. pays about $27 an hour in both union and nonunion facilities, Cole said.

Erich Merkle, vice president of auto industry forecasting for the consulting company IRN Inc. in Grand Rapids, Mich., said the issue with unions is they go on strike.Employees at Nissan's Smyrna, Tenn., plant voted down a UAW organizing effort on a secret ballot in 2001. The union has made failed attempts to get a foot in the door at the Toyota plant at Georgetown, Ky., and last year Honda executives sent letters to employees at its Lincoln, Ala., plant warning that any move toward organizing would "radically change" operations.

UAW officials did not return telephone messages seeking comment.Attica Scott, coordinator of the Kentucky Jobs With Justice organization that supports labor unions and has worked to organize the Toyota plant at Georgetown, said the UAW has to educate workers about the benefits of "having a voice on the job."Scott said union representatives help in cases of discrimination and job injuries.

The assembly plants benefit from going where suppliers are.Merkle pointed out the South already has German suppliers working with Daimler AG's Mercedes-Benz and BMW, and a Japanese supply network sprouted in Kentucky around Toyota's plant.He said the close proximity is a "savings for both the suppliers and the automaker."

BMW spokesman Bobby Hitt said his company, which has operated in Upstate South Carolina since 1995, and likely its established supplier system, see no crowding on the southern landscape.Research and education resources that automakers want also are taking root in the Southeast.Seven universities — Tennessee, Auburn, Clemson, Mississippi State, Alabama, Alabama-Birmingham and Kentucky — have joined in an automotive research alliance.

The Clemson University International Center for Automotive Research, with BMW's U.S. subsidiary and Michelin as close partners, already offers master's and doctorate programs in automotive engineering.Foreign automakers have been pouring money into the region, accelerated in part by the weak dollar.

BMW has announced a $750 million expansion, with plans to add about 500 jobs."Obviously at the exchange rate right now, if one has a plant in the United States it is a good time to expand it," BMW's Hitt said.

Kia is preparing to spend $1.2 billion for its Georgia plant, and Toyota is investing $1.3 billion for new operations in Tupelo, Miss., to complement its Kentucky plant employing 7,000.The economic bounties for winning communities are substantial. Toyota estimates that payrolls for its new plant in Mississippi and related ongoing jobs will total more than $300 million a year by 2011.

Volkswagen no doubt has noticed the success in the region.Michael Randle, editor and publisher of Southern Business and Development magazine, said Volkswagen learned lessons when its assembly plant near Pittsburgh closed in 1988.Randle said this time "VW has got to make sure their decision is right."