VW News: Volkswagen's Chattanooga Expansion to add 2,000 Jobs to build new SUV

[Drew Dowdell]

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Volkswagen is gearing up expand their Chattanooga, TN plant, and that expansion could add as many as 2,400 jobs. Chattanooga currently builds the North American version of the Volkswagen Passat sedan and the expansion will be to grow capacity to build a new Volkswagen mid-size crossover SUV due in late 2016 as a 2017 model.

 

Part of the expansion will be a new Engineering and Planning center that will bring 200 jobs. The addition to the production facility will add another 1,800 new jobs once the plant is operational.

 

A study by the University of Tennessee Center of Business and Economic research estimates that on top of the 2,000 jobs provided by the plant expansion, another 7,800 job will be added to the economy via indirect jobs at auto parts suppliers and other ancillary jobs in the state.

 

During the construction and tooling phases, which are underway now, there will be around 5,300 temporary jobs added.

 

Volkswagen has shown a few mid-size crossover concepts in the auto show circuit in recent years. While we don't know the planned name yet, expect the SUV to look similar to the Volkswagen CrossBlue Concept and Volkswagen Crosscoupe GTE Concept.

 

Source: VW Media

 

Press Release on Page 2

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Herndon, VA (May 27, 2015) – A University of Tennessee Center of Business and Economic Research (CBER) study released today indicates that the expansion of Volkswagen’s Chattanooga manufacturing facility to produce a new midsize-SUV and the opening of a North American Engineering and Planning Center could create approximately 9,800 jobs and add $370 million in additional annual income, once the plant is fully operational.

 

“The findings in the CBER study demonstrate that the incentive package recently passed by the Tennessee legislature will result in an economic growth multiplier of several times the state’s investment,” said David Geanacopoulos, Executive Vice President for Public Affairs and General Counsel, Volkswagen Group of America, Inc. “We would like to thank Gov. Bill Haslam and Economic and Community Development Commissioner Randy Boyd for their leadership in fostering a business environment within Tennessee that is mutually-beneficial for the state and local economy as well as for companies like Volkswagen that have operations in the state.”

 

In addition to the 2,400 Tennessee workers directly employed by Volkswagen, the study projects that Volkswagen’s $704 million investment in the Chattanooga plant expansion, including the opening of a new North American Engineering and Planning Center, has the potential to:

• Generate $217 million of new income and more than 5,300 indirect and direct jobs in Tennessee during the construction and tooling phase
  

• Create roughly 9,800 jobs, once the plant is fully operational, including 1,800 potential jobs at the production plant, 200 engineering jobs at the VW North American Engineering and Planning Center, as well as positions at auto parts suppliers, and other jobs throughout Tennessee
  

• Be responsible for $370 million in additional annual income, once the plant is fully operational
  

“Extensive supplier linkages and good incomes earned by Volkswagen employees account for the significant employment gains and economic multiplier effects in Tennessee,” said William Fox, the study’s author and Director of the Center for Business & Economic Research at the University of Tennessee. “This includes jobs in many industries across the state, such as grocery stores, restaurants, shopping malls and construction.”

 

Construction for the Volkswagen Chattanooga expansion project is currently underway, and is expected to be completed during the summer of 2016. Production of the Volkswagen midsize-SUV is scheduled to commence at the end of 2016, marking the second Volkswagen model to be produced in Chattanooga, in addition to the Passat.

 

“The study underscores Volkswagen’s commitment to Tennessee, and we are excited to grow our team and the Chattanooga plant as we gear up for the production of our first-ever seven-passenger SUV for the U.S. market,” said Christian Koch, President and CEO, Volkswagen Chattanooga. “We appreciate our partnerships with Hamilton County Mayor Coppinger and Chattanooga Mayor Berke, as well as Governor Haslam, for their ongoing support of Volkswagen’s expansion in Chattanooga.”
The CBER study is commissioned by Volkswagen Group of America. Findings within the study are independent calculations by CBER researchers.

 

A full copy of the new study is available here: http://cber.haslam.utk.edu/pubs/bfox309.pdf.
CBER’s press release is available here: http://tntoday.utk.edu/2015/05/27/ut-study-volkswagen-plant-expansion-add-9800-jobs-state-economy/.

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[SalesmanSean]

This is good news for the economy, but I wonder if this proposed new vehicle will really be enough to spark sales and make VW truly competitive in the American market.  I'm not a fan of their stuff, personally, because I think they lack any sort of style whatsoever, but I also know that is just my opinion.  I do, however, feel that more or improved competition is always a good thing.  When I was a runner in high school I always posted my best times against the best competition, because they make you strive to be better, and industry is no different.  I wish something like this would happen in my area, because the region could definitely use some more jobs.

[G. David Felt]

They could build a combo of any of those but the bigger question is quality and reliability. So far VW has never won me over due to poor fit and finish and reliability.

[Suaviloquent]

The problem with VW is that they decontented too quickly, at a time when value brands like Hyundai and Kia really started to shed their value image. VW, already known for a reliable reputation of unreliability, now coming off as a mass-market, value player? Sure, initially the Jetta and Passat went through the roof, but now their products have been in the market; and anyone who wanted a value VW has one. 

 

The Golf is the vehicle that they've always stayed true to their roots, but right now they need to realize they have to do more than what Hyundai had to do to get noticed. 

 

I think this 3-Row crossover is a little late to the party. It'll need to be capable to contend in this class for the next 5-6 years before a redesign, and I just don't think VW has it in them to deliver a Golf-like level of experience in this class. Not when Ford and GMC have Denali and Platinum. Not with Citadel Durangos. Not with Pilot Elites or with Sorento SXLs. With all these different competitors offering the same top-end experience expected from VW, having all the latest gizmos; and offering real quality and premium features at a price level the VW is unwilling to compete in to protect cross-shopping against its premium brands in the family. 

 

The reason the Jetta is so terrible is because they don't want to get anything against the more profitable per-unit A3; because they also know anyone smart enough to consider VW would get the Golf hands down. 

[Drew Dowdell]

It's a really simple question for me;  Could the VW Crossover be better than the Grand Cherokee while also being more reliable?  On that second point, Jeep has set a fairly low bar (mostly because of the Eco-Diesel, but still).

 

I think the answer is likely no.

[regfootball]

this is 5 years late but considering how well audi crossovers sell and how desperately German wannabees want a German crossover but won't have the cash, this should sell well if VW prices it right.

 

then they also better build it right too

[SalesmanSean]

It's a really simple question for me;  Could the VW Crossover be better than the Grand Cherokee while also being more reliable?  On that second point, Jeep has set a fairly low bar (mostly because of the Eco-Diesel, but still).

 

I think the answer is likely no.

I have to echo your sentiment, there, I don't have faith that VW could make such a vehicle reliable in the long term.

[daves87rs]

It's a really simple question for me;  Could the VW Crossover be better than the Grand Cherokee while also being more reliable?  On that second point, Jeep has set a fairly low bar (mostly because of the Eco-Diesel, but still).

 

I think the answer is likely no.

 

 

+1

 

Granted the base ones don't do bad....but those higher trim levels....

[regfootball]

i have to admit, i like the styling of the crossblue and to be honest if it were available when we got our town and country recently (over Traverse and Explorer) I think it may have taken the crown.  But I would still have leased......never BUY a VW.....is what i hear