Volkswagen To Build New SUV At Chattanooga Plant; Local Investment Is $600 Million; Plant Employment To Double To 4,000; New R&D Center Set

Monday, July 14, 2014

Volkswagen officials said Monday morning they plan to build a new SUV line at the Chattanooga plant that already produces the Passat.

Also, a new research and development center with 200 engineers focusing on the U.S. market will be built at the Chattanooga plant.

The new seven-passenger, three-row, mid-size SUV is set to roll off the production lines in Chattanooga in late 2016.

County Mayor Jim Coppinger said, "Volkswagen’s announcement today of a $600 million  investment and 2,000 new jobs to produce a new SUV in Hamilton County is a continuation of our relationship with Volkswagen.

"This partnership has created over 2,000 jobs and generated over $640 million in annual income. Today, we have doubled the number of jobs to 4,000 people employed at Volkswagen with the announcement of  the 2,000 future hires  to make the new SUV.

"We are creating tremendous opportunity for the future with the announcement of  the new Volkswagen research and development center.

"Volkswagen’s commitment to Hamilton County also means the possibility  of more suppliers locating here, creating additional family wage jobs. July 14, 2014 is a very significant day in the history of Hamilton County and the future success of its residents."

County Mayor Coppinger was at Wolfsburg for the announcement along with Senator Bob Corker, Mayor Andy Berke and Governor Bill Haslam.

The announcement was made at an 8 a.m. webcast from Germany, which opened with a video of the CrossBlue being driven on a test track. The webcast switched to the Chattanooga plant two times during the broadcast as top local VW plant team members stood with new president Christian Koch.

Officials said immediate jobs needs will center on professional candidates with skills in areas such as purchasing, logistics, engineering, and human resources to begin the preparations for the parts, equipment and people needed to produce the new product line. Interested candidates can search and apply for open positions online at or on major online sites such as LinkedIn and CareerBuilder.

Officials said, "North America is a key market for the Volkswagen Group. As we set the stage for the next phase of growth, we plan to commit more than $7 billion to the region by 2018. These investments will enable Volkswagen to bring attractive products and advanced production systems to market, including a future vehicle that is central to our U.S. strategy.  

The model was earlier introduced at the Detroit Auto Show as the CrossBlue.

VW officials said Monday morning, "Within the framework of its Strategy 2018 plan, the Volkswagen Group is expanding its industrial footprint in the US. The Board of Directors of Volkswagen Group of America has decided to award the production of the new midsize SUV to the Chattanooga plant in Tennessee. The Group will be investing a total of approximately US $900 million (€643 million) in the production of a newly developed, seven-passenger SUV, and creating 2,000 additional jobs in the US. About US $600 million (€432 million) will be invested in Tennessee.

Prof. Dr. Martin Winterkorn, chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg, said, “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.”

“The Chattanooga-built mid-size 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.”

Officials said, "Apart from investing in the production of a new vehicle, the Chattanooga location is to receive a new, independent National Research & 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 qualified engineers working in Chattanooga. This decision is another element in the investment program that the Volkswagen Group has launched in the region. From 2014 to 2018, the Volkswagen Group will be investing more than US $7 billion in the U.S. and Mexico. It is Volkswagen’s goal to deliver 800,000 vehicles in the U.S. by 2018."

Senator Corker said, “I deeply appreciate Volkswagen’s significant long-term commitment to the hometown and state that I love. I am grateful for Governor Haslam’s steady leadership, for our mayors, our great community leaders and the workers at the Chattanooga plant, whose commitment to excellence helped pave the way for today’s announcement. Finally, I am thankful to be able to help see this through to today’s conclusion.

“One of the most meaningful days in my public service career occurred six years ago when I received the call from the Volkswagen board room that they had chosen Chattanooga. Today’s announcement is a similar high point, as VW’s significantly expanded presence means that thousands of more families will benefit from the good paying jobs being created at the plant.”

Governor Haslam said, "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. The impact of this announcement goes far beyond the 2,000 new jobs because of the large multiplier effect of the automotive industry, and 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.”

Mr. Koch 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.”

At Chattanooga, the new SUV will be integrated into existing plant structures. Existing areas in production will be used for the assembly of the midsize SUV. A total floor space of 50,000 m² (approx. 538,000 square feet) will be added to the existing production facility. The mid-size SUV, which is based on the CrossBlue concept vehicle, was developed especially for the North American market. The CrossBlue made its global debut at the 2013 North American International Auto Show in Detroit.

Today, 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. Prof. Dr. Winterkorn said, "We are pleased that Mr. Osterloh has declared his willingness to play a concentrated role in shaping our US strategy in the future. He will represent the views of the workforce. This is in line with the co-determination culture of Volkswagen, which is one of our key success factors.”

Mr. 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 mid-size SUV in the USA, we are taking a key step.”

Mayor Berke said, "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.”

“This announcement is great for Chattanooga and great for Volkswagen,” said Ron Harr, president and CEO of the Chattanooga Chamber. “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.’”

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