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Volkswagen Group of America Expands Chattanooga, Tennessee, Manufacturing Campus

Area Development Online News Desk (07/14/2014)
Volkswagen Group of America will expand its sole U.S. manufacturing facility in Chattanooga, Tennessee. The automaker will add an additional manufacturing line and create the National Research & Development and Planning Center of Volkswagen Group of America.

Volkswagen’s total global investment for the expansion will be $900 million, with $600 million invested in Tennessee and 2,000 new jobs being created in Hamilton County.

The expanded plant in the Enterprise South Industrial Park will manufacture a new automotive line, a midsize SUV for the American market. Production of the new SUV will begin in the fourth quarter of 2016 with the first vehicle expected to roll off the new assembly line by the end of 2016. The expansion will also create the National Research & Development and Planning Center of the Volkswagen Group of America.

“The United States of America is and will remain one of the most important markets of Volkswagen. Over the past few years, we have achieved a lot here. We are now launching the second phase of the Volkswagen campaign in the USA. With the midsize SUV, the expansion of the Chattanooga plant and the new development center, we are focusing on the wishes of US customers,” Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, in Wolfsburg said. “This is also a strong signal for the USA as an industrial and automobile production location. The Volkswagen brand is going on the attack again in America.”

"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.”

The state of Tennessee is providing a $165.8 million grant for costs associated with site development and preparation, infrastructure, production equipment acquisition and installation, and facility construction. In addition, the state will provide a $12 million grant for training new employees. As part of the incentive package, Volkswagen Group of America has agreed to waive its right to claim certain statutorily available tax credits directly related to the expansion.

“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,” Chattanooga Mayor Andy Berke said. “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,” Ron Harr, President/CEO of the Chattanooga Chamber, said. “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.”

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