Gov. Nathan Deal and top leaders from the Georgia Department of Economic Development are in Germany thanking Porsche and Mercedes-Benz for recent Atlanta headquarters investments while visiting with other prospects.
The visit comes as Porsche’s parent company, Volkswagen AG, remains embroiled in a scandal in which the automaker was found by U.S. investigators to have installed software on diesel-powered models that enabled them to falsify emissions test results on up to 11 million vehicles worldwide.
The group’s CEO, Martin Winterkorn, announced his resignation Thursday — apologizing for the error but stopping short of admitting any personal wrongdoing. Shares of the world’s top automaker by sales have tumbled since the revelations.
Volkswagen makes diesel-powered Passats in Chattanooga, Tenn., and German automakers supplying the factory have been among the many investing in Georgia recently. Volkswagen has ordered sales halted on affected models but has reportedly reassured Chattanooga leaders that the scandal wouldn’t diminish their plant’s importance to plans for U.S. market expansion.
Porsche AG CEO Matthias Müller, who visited Atlanta to open the new headquarters near the Hartsfield-Jackson Atlanta International Airport in May, is reportedly being tapped to become VW’s next chief executive.
A Georgia Department of Economic Development spokeswoman said it’s unclear whether the scandal’s effects for Georgia were discussed during meetings between Porsche officials and Mr. Deal, economic development Commissioner Chris Carr and Deputy Commissioner for Global Commerce Tom Croteau.
Keith Barclift, a project manager for the Northwest Georgia Joint Development Authority promoting four counties bordering Tennessee, said automotive is a small part of the region’s industrial mix and that it’s not home to any German suppliers.
“None of them that I can think of are specifically trying to serve just VW, so in terms of any kind of layoffs or anything like that, we’re not really worried,” Mr. Barclift said.
Philipp Schulz, president of voestalpine Automotive Body Parts Inc., an Austrian-based firm that makes structural steel components for cars, wouldn’t comment on the potential effects of a Volkswagen downturn but noted that the company has a diversified customer base including other German automakers around the South.
The company last year launched its second phase of expansion at its $62 million Cartersville plant to serve what it sees as buoyant demand in the region.
“We’re still seeing a future of growth from today’s standpoint,” Mr. Schulz said. “We chose Georgia because it’s centrally located between our customer base. We’re supplying all German transplants (and others of course) and that’s why we picked that location.”
The Georgia officials in Germany did take time to outside the Porsche headquarters in Stuttgart to celebrate the business climate that has been attracting such strong international investors: They held up one finger each to mark Area Development magazine’s ranking of Georgia as the top state for business for the second straight year.
The state is home to nearly 500 German companies employing 23,250 people and added one more to the list Thursday when Mr. Deal’s office announced that Sandler AG, a textile manufacturer, will invest $30 million to build a plant in Perry, Ga., to supply non-wovens to the U.S. market, eventually hiring 140.
Georgia’s exports to Germany totaled $1.33 billion in 2014, according to the department.
On the business mission, Mr. Deal is also slated to visit Munich, where the department’s continental Europe trade and investment office is located. Georgia and the state of Bavaria are partners in the Regional Leaders Summit, a forum of states and provinces with members from around the world.
The Pendleton Group is the presenting sponsor of Global Atlanta's Economic Development Channel. Subscribe here for monthly Economic Development newsletters.