HAMBURG -- VW brand's German union is fighting with Skoda over leadership of a factory that parent Volkswagen Group plans to open in eastern Europe.
VW Group CEO Herbert Diess said on Nov. 18 that the automaker is looking for a location for a new multi-brand plant in eastern Europe to start production after 2022.
The need for the factory arises because VW is converting its Emden factory in Germany to build electric vehicles and shifting production of the Passat midsize car to Skoda's lower-cost factory in Kvasiny, which builds the related Superb. The new plant will build the Skoda Karoq and Seat Ateca SUVs that are currently produced in Kvasiny.
Locations in Bulgaria and Romania are currently being examined for the plant, which will create 4,000 to 5,000 new jobs, sources told Automobilwoche, a sister publication of Automotive News Europe.
VW brand's works council has told management it wants the factory to be controlled by the core VW passenger cars business.
VW Supervisory Board Chairman Hans Dieter Poetsch said the company has not yet made a decision on which brand will lead the factory. "Skoda is one of the options," he told Automobilwoche.
Skoda's home base of the Czech Republic is not in the running because of its high wage costs, sources said.
Another option under consideration is to convert in an engine plant to build cars. VW's engine plants in Polkowice, Poland, and Gyor, Hungary, are potential candidates, sources said.