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VW goes aB ROAD

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

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VW goes aB ROAD

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  1. VW goes aBROAD

  2. History • Built a plant in Pennsylvania in 1970’s • Steady union fights • Sales slipped • Planned on expanding to Detroit but obliterated • Pennsylvania plant closed

  3. Improvement • 10 year plan to improve sales in the U.S. • Their goal • Increased FDI • “Americanized” Jetta • Marketing strategy of nationalism

  4. Chattanooga Tennessee • 1 billion dollar operation • 150,000 Sedans per year • 2,000 jobs • 1,350 acres

  5. 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 rates • No shipping charges • Lower wages for Tennessee workers

  6. “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

  7. Globalization • Foreign competitors able to enter the U.S. industry because of globalization

  8. What Drives Globalization • Two macro factors • 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

  9. What Drives Globalization (continued) • Extended GATT by establishing WTO • Created 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

  10. What Drives Globalization (continued) 2. Technological Change • Communication • Information processing • Transportation technology • Microprocessor • Internet • Transportation technology • All of these reduce cost of information processing and communication which makes it possible for firms to go global

  11. VW Taking Full Advantage of These Changes • Using computer-guided robot welding • Lasers that check tolerances within 1 mm • Automated engine control

  12. 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)

  13. Questions

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