Volkswagen AG CEO Martin Winterkorn was too busy with VW-Porsche merger talks to attend a ceremony Thursday at the automaker's new U.S. plant, a newspaper reported.
“This is a momentous time for the company,” a VW spokeswoman told the Chattanooga Times Free Press when explaining why Winterkorn was not traveling to Chattanooga, Tennessee, for the event.
Tennessee Governor Phil Bredesen and VW production chief Jochem Heizmann attended a wall-building ceremony at the plant.
The plant's CEO, Frank Fischer, said a planned merger between VW and Porsche would not affect building plans, adding: "After everything has been settled the company as a whole will be stronger than before."
The factory remains on schedule to start production by 2011 with an annual capacity of 150,000 cars. There are no plans to delay the project because of adverse conditions facing U.S. automakers, Fischer said.
Demand for U.S. cars should pick up by 2010, in time for the launch of the plant, so any delay in building would mean that VW was too late to satisfy that projected increase in demand, Fischer said.
Heizman said: “Despite the present situation on world markets, the U.S. market will recover and Volkswagen will be ready when that happens.”
Volkswagen Group of America will invest $1 billion in the plant and employ 2,000 people.
The Chattanooga factory will build a new midsize sedan specially designed for the North American market. About 30 percent of the sedans will be diesels.
Volkswagen group including the Audi brand aims to triple sales in the U.S. by 2018. Last year the group's U.S. car sales fell 4.5 percent to 314,500.
Winterkorn stayed at VW's headquarters on Thursday to work VW's merger with Porsche.
On Monday, VW Chairman Ferdinand Piech said he favors Winterkorn over Porsche CEO Wendelin Wiedeking to run a combined VW and Porsche.
The companies are talking about their future relationship following Porsche Automobil Holding SE's decision to abandon its plan to seize control of Europe's largest automaker and instead explore a merger with VW.
Porsche ran up heavy debts buying a 51 percent stake in VW and the company has been unable to raise money to complete its aim of taking a 75 percent stake in VW.
Now that its gamble to take over VW has backfired, Porsche is fighting for influence in a merger between Porsche and VW.