Chattanooga Wins Volkswagen Plant Competition

Volkswagen will begin building a new automotive plant in Tennessee this year that will have an initial build capacity of 150,000 cars annually when it goes online in 2011.

German automaker Volkswagen, who at one time had an automotive plant in Pennsylvania and then closed it, has decided on building an all-new plant in the US, selecting Chattanooga, Tennessee as the winning location. For the first time in two decades Volkswagen vehicles will be built in the US, an investment of $1 billion that VW says will create 2000 jobs.

“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 new VW plant will be located in the Enterprise South Industrial Park, a business park situated 12 miles northeast of downtown Chattanooga. Owned by the city of Chattanooga and the county of Hamilton, the 1350 acre site is certified as an industrial megasite by the Tennessee Valley Authority (TVA). Initial production capacity for the new facility is 150,000 vehicles, including plans to build a new midsize sedan that will be designed specifically for the North American market. Construction will commence later this year; production is scheduled to begin in early 2011.

Volkswagen expects to hire about 2000 people for the plant and expects many more jobs from related industries to also be created.  Alabama and Georgia which both border the Chattanooga area should also benefit from the new automotive plant.