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 $900 million in the production of a newly developed, seven-passenger SUV, and creating 2,000 additional jobs in the US. About $600 million will be invested in Tennessee.
“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.”
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 $7 billion in the US and Mexico. It is Volkswagen’s goal to deliver 800,000 vehicles in the US by 2018.
“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,” 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, 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.”
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.”
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 sq ft) will be added to the existing production facility. The midsize 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.
“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,” said Hamilton County Mayor Jim Coppinger. “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.”
“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,” said Chattanooga Mayor Andy Berke. “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 & 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.’”