vw goes ab road
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VW goes aB ROAD. History. Built a plant in Pennsylvania in 1970’s Steady union fights Sales slipped Planned on expanding to Detroit but obliterated Pennsylvania plant closed. Improvement. 10 year plan to improve sales in the U.S. Their goal Increased FDI “Americanized” Jetta - PowerPoint PPT PresentationTRANSCRIPT
VW GOES ABROAD
History Built a plant in Pennsylvania in 1970’s Steady union fights Sales slipped Planned on expanding to Detroit but
obliterated Pennsylvania plant closed
Improvement 10 year plan to
improve sales in the U.S.
Their goal Increased FDI “Americanized”
Jetta Marketing
strategy of nationalism
Chattanooga Tennessee 1 billion dollar operation 150,000 Sedans per year 2,000 jobs 1,350 acres
Adaption's to the car Change gearing of it’s transmissions Rear drum, rather than disc, brakes European character was lost The car isn’t as “German” Thousands below the original price
No uncomplimentary exchange ratesNo shipping chargesLower wages for Tennessee workers
“Americanizing the Jetta”
New standard engine is smaller and much less powerful than previously standard engine
Made the Jetta bigger and closer to the size of competing mid size sedans like the Honda Accord
Globalization Foreign competitors able to enter the
U.S. industry because of globalization
What Drives Globalization
Two macro factors
1. Decline of trade barriers – Primary responsibility of the World Trade Organization and GATT
GATT lowered barriers to the free flow of goods and services
Then completed the Uruguay Round in 1993 which further reduced trades
What Drives Globalization (continued)
Extended GATT by establishing WTOCreated to make sure nation-states follow
the rules in the trade treaties signed by its 153 nations
World is a single market place with world trade growing faster than world output
What Drives Globalization (continued)
2. Technological ChangeCommunicationInformation processingTransportation technologyMicroprocessor InternetTransportation technologyAll of these reduce cost of information
processing and communication which makes it possible for firms to go global
VW Taking Full Advantage of These Changes
Using computer-guided robot welding
Lasers that check tolerances within 1 mm
Automated engine control
Will they meet their goal?
Potential top car manufacturer in the World?
If plant continues to grow, they plan on building one for Audi (VW owns)
Questions