July 14, 2014 – The Volkswagen Group of America announced today that it will invest nearly $1-billion into its latest North American project in Chattanooga, Tennessee. “The United States of America is and will remain one of the most important markets for Volkswagen. Over the past few years, we have achieved a lot there. We are now launching the second phase of the Volkswagen campaign in the US. With the midsize SUV, the expansion of the Chattanooga plant and the new development center, the focus is on the wishes of the US customer. This is also a strong signal for the US as an industrial and automobile production location. The Volkswagen brand is going on the attack again in America,” said Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg.
Apart from investing in the production of a new vehicle, the Chattanooga Facility is to receive a new, independent National Research and Development and Planning Center of the Volkswagen Group of America for project coordination in the North American market. The objective is to identify customers’ feedback in the market and to integrate them more expeditiously into existing and planned vehicle models. This will lead to the creation of approximately 200 additional qualified engineers working in the Chattanooga area. This decision is another element in the investment program that the Volkswagen Group of America has launched in the region. From 2014 to 2018, the Volkswagen Group will be investing more than $7-billion in the U.S. and Mexico. It is Volkswagen’s goal to produce approximately 800,000 vehicles in the U.S. by 2018.
The new SUV will be integrated into existing plant structures within the Volkswagen Strategy 2018 plan. Existing areas in production will be used for the assembly of the midsize SUV. A total floor space of approximately 538,000-square feet and 2,000 new jobs will be added to the existing production facility, where the U.S. built Passat is made. Christian Koch, CEO and Chairman of Volkswagen Group of America Chattanooga Operations, said: “We are proud to be making the new midsize SUV here. This is fantastic news for the plant and proof of the confidence placed in the workforce that does a great job here making high-quality cars every day.”
The midsize SUV, which is based on the CrossBlue concept vehicle, was developed especially for the needs of American consumers. The CrossBlue made its global debut at the 2013 North American International Auto Show in Detroit. “The Chattanooga-built midsize SUV will allow us to fulfill the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand,” said Michael Horn, President and CEO Volkswagen Group of America. “We are eager to be entering this growing vehicle segment with a world-class, seven-passenger SUV from Volkswagen.”
Volkswagen also announced that the Chairman of the Group Works Council of Volkswagen, Bernd Osterloh, will join the Board of Directors of Volkswagen Group of America, Inc. Osterloh stated: “It is important for us that our colleagues in the U.S. know that we also care about the production site and the employment in Chattanooga. I am looking forward to my work on the Board. I am determined to uphold the interests of Volkswagen employees in Chattanooga. The North American market offers considerable opportunities; in my opinion, these have not been pursued with sufficient consistency in the past. With today’s decision to produce the midsize SUV in the USA, we are taking a key step.”
Political and community support for this monumental project seems to be strong, with everyone from the Governor of Tennessee to the Chattanooga Chamber of Commerce turning out. “Today is an exciting day not just for Chattanooga and Hamilton County but for all of Tennessee, and I want to thank Volkswagen for its significant long-term investment in our state,” Tennessee State Governor Bill Haslam said. “The impact of this announcement goes far beyond the 2,000 new jobs because of the large multiplier effect of the automotive industry. Adding an additional manufacturing line and the National Research & Development and Planning Center sends a clear signal that Tennessee can compete with anyone in the global marketplace.”
Hamilton County, Tennessee Mayor Jim Coppinger reiterated saying, ““Hamilton County is pleased to partner with Volkswagen as they create 2,000 new family-wage jobs which will also generate very positive economic ripple effects for residents throughout our community. By working with Volkswagen to build on the tremendous success of their initial job creation project, we are establishing a foundation for continuing economic growth for years to come.” Chattanooga Mayor Andy Berke went on to say, “Volkswagen is one of Chattanooga’s largest and most valued employers. They have brought 12,400 living-wage jobs to our region, employed Chattanoogans and helped build our middle class. This expansion will result in a huge capital investment and thousands of new jobs”.
“From day one, the City and County have worked hard to see today become a reality, when we can announce that Volkswagen will be adding more jobs, more investment and expanding their presence in Chattanooga,” said Ron Harr, president & CEO of the Chattanooga Chamber.“This announcement is great for Chattanooga and great for Volkswagen. Thanks to Volkswagen’s expansion, we will have a much easier time recruiting additional automotive suppliers to help them build out their supply chain while also cementing Chattanooga as The Center of the Automotive South.”
This is another example of how foreign automakers are recognizing that U.S market cars should be built in the U.S. While it is not the same old status quo, it makes good sense. This system pays dividends for the U.S. economy, the workforce, and the automakers. It is a “win – win” scenario.