Volkswagen has big plans for its Chattanooga plant

Volkswagen has announced that its new “mid-size SUV” will be built at the company’s manufacturing facility in Chattanooga, a move which is expected to bring in over 2,000 jobs to the Tennessee city. The factory was opened in 2011 amidst much fan-fare as part of an ambitious plan to sell at least 800,000 vehicles domestically by 2018. The company also announced that it will be establishing a new “National Research & Development and Planning Center” at the Tennessee campus.

Volkswagen’s chairman, Martin Winterkorn, has called the seven-passenger utility vehicle a “true American car … built by real Americans”, at a news conference in Wolfsburg, Germany. A high-capacity crossover built on the versatile MQB architecture that underpins all of the company’s newest products, it was certainly designed with the American consumer in mind. A diesel-electric hybrid in concept form, there’s still no word on what powertrains the production version might offer.

If the company hopes to meet its goal of to becoming the world’s biggest automaker then it needs to “beef up its portfolio”, claims Michelle Krebs, senior analyst for AutoTrader.com. Production of the vehicle will commence at the end of 2016, by which time some $900 million will have been invested into the project and 538,000 square feet of floor space will have been added to the production facility. “This investment likely will address one of the glaring holes, an entry in the fastest-growing vehicle segment of small crossovers,” said Krebs. Christian Koch, head of Volkswagen’s Chattanooga operations, acknowledged this saying that the “vehicle will play a big role in our success here in America”.

The announcement has come shortly after the United Automobile Workers targeted the Chattanooga plant to organize the workers. This move has been met with heavy opposition from Tennessee’s political leaders who claim that unionizing the workers would put state incentives for the plant’s expansion at risk. Volkswagen acknowledged the labor struggles and announced that Chairman of the Group Works Council, Bernd Osterloh, will be joining the board of directors for Volkswagen America. Osterloh has vowed to “uphold the interests of Volkswagen employees in Chattanooga”. Red more about this story here.