• Jul 15th 2008 at 10:36AM
  • 30
Volkswagen announced this morning that it would build a manufacturing plant in Chattanooga, Tenn. where it will build a vehicle specifically for the North American market. The plant will employ 2,000 workers from the tri-state area and is expected to invest $1 billion in the local economy.

The plant is an integral part of Volkswagen's plan for expansion in the N.A. market, with sales expected to crest 800,000 units by 2018. The 1,350-acre site will produce 150,000 vehicles annually – specifically a midsize sedan – in 2011.

Make the jump for the full press release.



Company will invest $1 billion and bring about 2,000 direct jobs to tri-state area

HERNDON, Va. (July 15, 2008) - Volkswagen Group of America, Inc. announced today that it will build a U.S. automotive production facility in Chattanooga, Tenn., where it will produce a car designed specifically for the North American consumer and invest $1 billion in the economy. The announcement is an important element of the company's overall U.S. strategy of connecting with its customers, increasing its competitiveness and tripling its U.S. customer base in the next decade.

"The U.S. market is an important part of our volume strategy and we are now very resolutely accessing that market," said Prof. Martin Winterkorn, CEO of Volkswagen AG. "Volkswagen will be extremely active there. This plant represents a milestone in Volkswagen's growth strategy. We will be selling 800,000 Volkswagens in the U.S. by 2018, and this new site will play a key role. This, along with our growth strategy, is a prerequisite for the economic success of the company in the dollar region. We look forward to establishing an important mainstay for ourselves when we become the biggest European carmaker there."

"This is a significant step forward in achieving our goals in the U.S. market and a clear sign of the Volkswagen Group's commitment to the North American consumer. Today's decision is a fundamental part of our new strategic direction in the U.S. and our five-pillar strategy," said Stefan Jacoby, President and CEO of Volkswagen Group of America. "Chattanooga is an excellent fit for the Volkswagen culture, having an exceptional quality of life and a long manufacturing tradition."

The company will build the facility in the Enterprise South Industrial Park, located 12 miles northeast of downtown Chattanooga. The 1,350-acre site is 100 percent owned by the city of Chattanooga and Hamilton County and is certified as an industrial megasite by the Tennessee Valley Authority. Enterprise South is adjacent to Interstate 75. Initial production capacity for the facility is anticipated to be 150,000 vehicles, including a new midsize sedan designed specifically for the North American market. Production is scheduled to begin in early 2011.

"I'm enormously pleased by the announcement from Volkswagen Group of America and grateful for the company's investment in Chattanooga and in the people of Tennessee," said Tennessee Gov. Phil Bredesen. "I believe Volkswagen chose Tennessee because of our shared values, our commitment to innovation and our strong respect for the environment. This project will have a significant impact on the economy of Tennessee and the region for decades to come."

"I couldn't be more pleased that the spirit of partnership between the state of Tennessee, Volkswagen and the government and business leadership of Chattanooga and Hamilton County has resulted in this significant investment in Enterprise South," said Matt Kisber, commissioner of the Tennessee Department of Economic and Community Development. "Volkswagen's investment in this community means the hard work and dedication demonstrated by people at the state and local level to create one of the best business climates in the country is paying off."

"We started with a vision of transforming an idle Army facility into the source of thousands of family-wage jobs," said Hamilton County Mayor Claude Ramsey. "Over the last 14 years, I've worked with four different city mayors as well as county commissioners, city councilmen and countless others in overcoming barriers and objections to that plan. Today, we stand with our new friends from Volkswagen to make a historic announcement that will create new opportunities for our community for years to come."

"Volkswagen and Chattanooga have a lot in common," said Chattanooga City Mayor Ron Littlefield. "Both are serious about environmental sustainability and 21st Century manufacturing."

Environmental responsibility is a core value of the Volkswagen Group. The company's focus on sustainable mobility and environmentally responsible manufacturing are right in line with Chattanooga's strong environmental commitment. As an expression of this shared commitment, the state of Tennessee, Volkswagen and Chattanooga-area organizations are partnering to distribute two saplings for every tree displaced by the project. The new trees will be planted by local school children.

According to United States Sen. Bob Corker, who was mayor of Chattanooga when the city and Hamilton County acquired the land and established Enterprise South as an industrial park, the Volkswagen announcement represents a new chapter in Chattanooga's success story. "Through twists and turns, our community has maintained focus, invested wisely and exercised tremendous effort and energy in recruiting a major employer to Enterprise South. The breaking of this final barrier and the realization of the vision to which we have held true will take us to levels we can only begin to imagine," said Corker.

He continued, "Volkswagen is the very best manufacturer and partner we could possibly have in terms of our shared values, and as a result of their enormous investment, not only will Chattanooga be forever changed, but our entire state will reap great benefits from the new suppliers that this facility will attract to the region. I am proud to have been part of a dedicated team that has worked seamlessly on this effort and celebrate this outstanding achievement for our city and our state."

United States Sen. Lamar Alexander praised Volkswagen's decision to locate at Enterprise South, saying, "Volkswagen and Chattanooga, the ideal marriage: one of the world's most admired companies and one of America's most livable cities. This decision keeps Tennessee on the road to becoming the No. 1 state in auto jobs. Congratulations especially to Gov. Bredesen, Sen. Corker and Mayors Ramsey and Littlefield for their leadership," Alexander concluded.

"Over the past seven months, more than 100 Tennesseans at the local, state and federal level have worked odd hours on short deadlines to help us reach this day," said Trevor Hamilton, vice president of economic development for the Chattanooga Area Chamber of Commerce. "From this day forward, we dedicate ourselves to partnering with Volkswagen to move from construction to production as quickly as possible. We will unify our team with Volkwagen's to ensure long-term success for the company, our community and the state of Tennessee."

With the new plant, Volkswagen will bring about 2,000 direct jobs to the area, and will add a significant number of jobs in related sectors. It is expected that these jobs will come from the tri-state area, pulling from the labor force of Tennessee as well as Georgia and Alabama. Volkswagen of America received an attractive, comprehensive package of incentives for the new facility from Gov. Bredesen's office and the Tennessee Department of Economic and Community Development. The statutory incentives are tied to job creation and capital investment. Additional support includes assistance for public infrastructure and job training, each designed to ensure the local economy best leverages Volkswagen's investment to benefit the local work force and ensure the facility's success.

"This area has a deep base of well-trained labor, with excellent engineering and manufacturing programs at the universities and technical colleges," added Jacoby. "Thanks to the visionary leaders and people of Chattanooga, we're confident that the values of this area are compatible with our own, and we envision a long and productive partnership."

Last year, Volkswagen outlined a new strategic direction in the U.S. based on five pillars: product, brand positioning, dealer network, organization and local production. As it moved forward to assess the potential for local production, the company considered many other site options and earlier this year had narrowed its search to Alabama, Michigan and Tennessee.

"We reviewed three excellent sites, all of which had the specific qualities necessary to build a plant in the United States," said Jacoby. "Both Gov. Granholm and Gov. Riley were strong advocates on behalf of their states and the citizens they represent. This was a difficult decision, but we look forward to continuing our relationships with both states. I thank both governors and their staffs."

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    • 1 Second Ago
      • 7 Years Ago
      No sweet home Alabama? Too bad Alabma was starting to look like the new Michigan.

      Alabama - MB, Toyota, Honda, Hyundai

      Tenn - Nissan and now VW

      Georgia - Kia

      Mississippi - Toyota

      Way to go southern states! SEC must be putting out something other than football players! Those states are starting to kick ass while attracting business and development.
        • 7 Years Ago
        The southern states are getting all the new factories because they are right to work states - no BS from the UAW. There are also plenty of workers that used to work in textiles, furniture, and tobacco. Most of those jobs are in China now...
        • 7 Years Ago
        Add one more...

        South Carolina - BMW
        • 7 Years Ago
        Right to work states vs. union labor states maybe?
        • 7 Years Ago
        oh and BMW in South Carolina.
        • 7 Years Ago
        Don't forget Tennessee has a GM plant as well...the former Saturn plant in Spring Hill
        • 7 Years Ago
        And they win bowl games against the Big Ten!
      • 7 Years Ago
      That sucking sound you hear in MI is all of those bloated UAW jobs leaving the state.

      UAW, you reap what you sow.
      • 7 Years Ago
      Perhaps the reason American Automakers continue to decline whilst others (even locating facilities IN the U.S.) are doing much better...






      Town Car?

      Yeah... as if I'd ever drive one of those behemoth pieces of crap. Then again, I don't have to stuff my pants, either.

      Come on GM! The Hummer is sooo yesterday! You can make a bigger one, I know you can! :-)

      As for the comments about unions.. hilarious. Let's just do away with any regulation or collective negotiating with Corporate America... and rely on their benevolence instead. /snark

      • 7 Years Ago
      We want all that need a Real Estate professional to log on to www.theedringtonteam.com and let us help move VW employees to our community.

      George E Edrington
      • 7 Years Ago
      As they say: the South will rise again!!!

      Seriously, this is good for our trade balance, it is good for Chattanooga job market and it will bring extra ancillary jobs. For those complaining about Detroit, people who would buy these VW products would have bought in anyway regardless where they are built. Might as well be built here. One more thing, the UAW better get its act together, they are increasingly becoming irrelevant.
      • 7 Years Ago
      FYI, NJ, NY, Conn is the tri state area....

        • 7 Years Ago
        or PA, WV, OH

        It depends where your live retard.
      • 7 Years Ago
      Well, it's about time!!!!!

      Anything to get away from the Lower Saxony Group of shareholders who have been a part at least, in model designs and marketing over here. When VW wanted to meet with Detroit/Michigan officials about the corporate headquarters they dragged their feet and VW got tired of it.

      The Unions aren't in control of everything and it is hoped that VW will provide living wages and a good benefits package to the new employees. I could care less though about a 'Camry-killer' - I certainly hope they tap into some cool, fun, fast, and practical designs for us. Either way, it's time they restart the manufacturing again after being the first European company stateside. Unless they screw it up, this has great up-side for we VW owners.
      • 7 Years Ago
      I for one welcome our Germanic overlords to our humble Southern lands and wish them many years of corndogs, boiled peanuts and lush landscapes.

      I suspect they learned how to power a VW with kudzu. Shhhh...
      • 7 Years Ago
      das crazy. OG...there's too much room for jokes here, so I'm moving on to the next story.
      • 7 Years Ago
      I live in Chattanooga,TN and I must say I think this is a great accomplishment for them. The economy here was about to start its downturn like the rest of the country, had lost 2 other manufactuer bids (Kia and Toyota) so this was excellent day for us here. I do think the less pay rate here as well as no UAW was a key selling point. Also the fact that CHattanooga rests on 3 major highways (I-75, I-24, I-59) plus the fact we have a huge rail system in the area that literally connects north, south , east and west. These are already in place (even the exit ramps from highway 75 were built over 2 years ago to entice businesses to come here with highway access ease) and there is a lot of empty land around here for other companies to set up shop if VW needed suppliers to.
      Way to go Chattanooga! Now VW, build us something awesome in the form of whatever this new American Passat and Jetta will be and make sure we still get the Golf/Rabbit!
        • 7 Years Ago
        Congratulations! You win the prize for best insight for building in the south.
        Top 5 VW volume dealers in the US.
        #1 Gunther Coconut Grove. Fl
        #2 Gunther Miami, Fl
        #3 Boardwalk VW Somewhere in Texas
        #4 West Luther in St Paul Minn.
        #5 Toss up between a dealer in Scottsdale and a dealer in Santa Monica, Ca.

        Other than Luther in St Paul, the top ten dealers are littered throughout the southeast and southwest. On average, dealerships in the south, THE WHOLE SOUTH!..which includes Arizona and SOUTHERN CALIFORNIA, sell more cars on avergae than dealers in the rest of the country. Maybe with the exception of Northern New Jersey. Also, latinos love VW's. VW is using the business model that many other foriegn companies have used. Build where the land is cheap, where the populace is growing and where the UAW has no political power. BTW...I grew up in the Detroit Metro. My entire family lives in that crap hole. It is depressed beyond words. VW just moved their HQ from Auburn Hills, Mi to Herndon, Virginia. Smart move.
        With this factory, VW is centrally located between the southeast and mid-atlantic, two of VW's biggest regions.
      • 7 Years Ago
      Pardon me, boys. Is that the Chattanooga choo-choo?
      • 7 Years Ago
      whoo-hoo! As a Chattanooga native I can say that it's about time that a major manufacturer take advantage of the property at Enterprise South. It's an ideal location that has sat vacant for much too long. Welcome VW!
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