- May 15, 2006
VW considering moving some production to Mexico
The reason for the move is currency issues, specifically a declining U.S. dollar and a strong euro. Coupled with inefficiencies in its German plants, including the Passat assembly plant, exchange rate problems have hampered VW's financial recovery in the North American market.
If it happens, the shift won't happen overnight - the plan would be to start producing Passats in Mexico by 2009. The reaction of German trade unions will be interesting, and the cynical among us might label this rumor as a company move to strengthen its bid for dramatic restructuring of its money-losing plants in western Germany, a move which is strongly opposed by the unions.