Broadcasting from its "Mobile Life Campus" in Wolfsburg, Germany (and crowing about Germany's World Cup win last night), Volkswagen has just announced that its new "Midsize SUV" will be built at the company's Chattanooga, TN manufacturing facility. Further, the company says it will establish a new "National Research & Development and Planning Center" at the Tennessee campus.
Without divulging new details about the vehicle, VW Chairman Prof. Dr. Martin Winterkorn confirms that the seven-passenger utility vehicle, previewed by the CrossBlue Concept, will be coming to Chattanooga. Winterkorn called the upcoming family hauler a "true American car ... built by real Americans."
Certainly, the CrossBlue's progeny has been designed with the US customer in mind, a high-capacity crossover (despite VW's insistence in calling it an "SUV") built on the versatile MQB architecture that underpins all of the company's newest products.
In total, VW expects to create some 2,000 jobs by way of its announced efforts, with more than $7 billion invested in the US and Mexico.
A diesel-electric hybrid in concept form, there's still no word on what powertrains the production version might offer – save for VW hinting that the platform is versatile enough to take hybrid, 2.0T, V6 or some combination of power therein.
Production on the utility vehicle will commence at the end of 2016. By then, some $900 million will have been invested in the project, with some 538,000 square feet of floor space added to the production facility.
As for the new R&D center, Winterkorn explains that its primary function will be to speed up the response time in bringing relevant product to US costumers. More than 200 new engineers will call VW Chatttanooga home, helping to integrate customer feedback "expeditiously" into currently built models, as well as planned vehicles.
In total, VW expects to create some 2,000 jobs by way of its announced efforts, with more than $7 billion invested in the US and Mexico from 2014 through 2018. (Actually, Dr. Winterkorn said "7 billion euros" in his live speech, contrary to the $7 billion figure noted in the VW press release; we're reaching out to the company for clarification.)
Finally, with a nod to some of the labor struggles VW, the United Auto Workers and political forces within the state of Tennessee have undergone over the last year, the company has announced that Chairman of the Group Works Council, Bernd Osterloh, will be joining the board of directors for VW America. Osterloh vows to "uphold the interests of Volkswagen employees in Chattanooga."
Scroll down to read the full VW press release.
Jul 14, 2014
Winterkorn: "This model will play a key role for Volkswagen's presence in North America"
Volkswagen Group of America to invest approximately $900 million in the project
Second model to be produced in Chattanooga, in addition to the US-built Passat, starting from the end of 2016
Approximately 2,000 additional jobs to be created
Establishment of a National Research & Development and Planning Center in Chattanooga
Group Works Council Chairman Osterloh to be named a member of the Board of Directors of Volkswagen Group of America
Wolfsburg, July 14, 2014 – 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.
"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.
"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 US$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.
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. "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 codetermination culture of Volkswagen, which is one of our key success factors," Prof. Dr. Winterkorn said.
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."
"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.'"