Alabama Loses Race For Volkswagen

FRANKFURT, Germany (AP) - Volkswagen AG is headed to Tennessee
to build cars in the U.S. after picking the southern state as the
site for its new plant.

Lower Saxony Minister President Christian Wulff, who sits on the
supervisory board of Europe's largest automaker, said the company
picked the city after board, the German equivalent of a U.S. board
of directors, debated the merits of the location and its benefits.

Chattanooga, Tennessee beat out bids by Alabama and Michigan for
the plant, which is part of the Wolfsburg-based company's strategy
to increase its presence in America.

Gov. Bob Riley says he's disappointed Volkswagen has chosen Tennessee for an assembly plant rather than
Huntsville. But Riley says he is pleased the plant will be located close to Alabama.

“Our congratulations go to Chattanooga and to my friend Governor Bredesen," Riley said. "I want to express my deep appreciation to Volkswagen for considering Alabama and selecting us as a finalist site. My thanks go to the local leaders in Huntsville and Limestone County for their complete support throughout this very thorough selection process. Alabama is obviously disappointed our state was not selected, but we are extremely pleased this Volkswagen plant will be located close to us.”

The proposed plant is part of the company's strategy to increase
its presence in the U.S., where it holds only 2 percent of the
market.

The automaker has said the surging euro - which makes goods
imported from Europe more expensive in the United States - has
pushed along plans for a new production facility.

Volkswagen, which closed its last U.S. production facility near
Pittsburgh in 1988, has said actual production at the facility is
not expected to start until at least 2010.

(Copyright 2008 by The Associated Press. All Rights Reserved.)