Volkswagen is biting the bullet and opening a plant in Chattanooga Tennessee in early 2011, this will be VW’s first vehicle production unit in the US. The Supervisory Board of Volkswagen AG, Germany have agreed to the establishment and approved an investment of up to 620 million Euros the equivalent of $1 billion USD.
The first step is for an annual capacity of 150,000 vehicles designed and a full production facility with a body shop, paint shop and assembly line. A modular production concept will be designed to ensure maximum flexibility.
The first car to roll off the line will be a vehicle designed and built specifically for the U.S. market. It is expected to be a mid-size sedan. In the medium term, Volkswagen will aim for some 2,000 employees working directly for the company, in addition to large numbers of outside jobs, for example, in supply and logistics.
According to Prof. Martin Winterkorn, CEO of Volkswagen AG, the growth strategy for VW will be 800,000 cars a year by 2018 in the ‘United States’, giving rise to the thought that this may not be VW’s only American plant.
Chattanooga was chosen because it had an already developed supply structure, and the potential of skilled labor and a direct connection to the transport infrastructure from the 550-acre site.