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Yet More Jobs Follow Volkswagen to Tennessee

June 24, 2015 by admin 1 Comment

University and industry researchers have examined the impact of Volkswagen’s operation on the Tennessee economy. They have concluded that the upcoming expansion will create thousands of new jobs and pump millions of dollars into the local economy annually.

Ever wonder why state governments throw out the welcome mat and offer generous incentives for international automakers? It comes down to just one word: jobs. Indeed, ever since Volkswagen set up shop near Chattanooga, Tennessee, the German automaker has created thousands of direct jobs with many times that number of indirect positions following.

Gainfully employed workers pay taxes, buy goods and services, purchase homes and otherwise contribute to their local economy. Notably, every state benefits from automotive industry investing — Tennessee has been benefiting in a big way, particularly as both Nissan and Volkswagen expand or are planning to expand their operations in the Volunteer State.

Center for Automotive Research Study

According to a January 2015 report by the Center of Automotive Research — Contribution of the Automotive Industry to the Economies of All Fifty States and the United States — more than 9,000 people are employed directly by car manufacturers in Tennessee. Another 53,000 have found work with body and trailering manufacturing companies and 218,000 are employed by parts manufacturers.

Volkswagen Passat in TennesseeThat’s more than 280,000 of just over 3 million people in the state’s labor force. Furthermore, those numbers will be rising over the next few years as Volkswagen doubles its lone US plant to accommodate an upcoming new vehicle, a midsize SUV.

UTK CBER Volkswagen Impact Study

A recently released study by the University of Tennessee, Knoxville (UTK) bears witness to what Volkswagen is doing in Tennessee. In July 2014, Volkswagen announced its plans for Chattanooga, what led to the university’s Center for Business & Economic Research (CBER) to analyze the impact of the plant’s expansion further.

The university report — Economic Impact of Volkswagen’s Chattanooga Expansion Plan — was prepared by William Fox, CBER Director and Lawrence Kessler, a research assistant professor with CBER.

The report noted that Volkswagen will be adding more than 500,000 square feet to its facility located in Hamilton County, Tennessee. The manufactory will gain 1,800 new workers. Moreover, another 200 engineering jobs will also be added to that number, employees working in a new Research & Development (R&D) center, the first automotive R&D center located in the US southeast.

Volkswagen says that it will take five to eight years for the new positions to be filled as production of the new model ramps up. The plant will be finished in the first half of 2016 with production commencing later in the year.

Temporary and Permanent Employment

Volkswagen SUVConstruction alone will add nearly 5,400 jobs while the plant is being built and contribute $217 million to the Tennessee economy. State and local coffers will enjoy a one-time increase in tax revenues too, totaling $20.5 million.

With 2,358 people currently employed directly by Volkswagen in Tennessee, the new totals will approach 4,400 when the hiring process comes to an end.

Once fully operational, the UTK researchers estimate that the new plant will create 9,799 new jobs and pump $372.6 million annually into the local economy. Further, local and state governments will see a $35.1 million bump in annual tax revenue through sales and other taxes.

OEM Contribution and the Multiplier Effect

Volkswagen’s presence in Tennessee has also encouraged original equipment manufacturers (OEMs) to expand or set up their operations in the region to serve the automaker. The UTK researchers found that 20 companies have done so since 2009, adding 2,257 jobs to the area and contributing nearly $200 million to the economy in less than six years. That financial investment is a gift that keeps giving and will likely increase as Volkswagen expands its operation.

The UTK researchers also honed in on the multiplier effect of auto industry job creation, noting that for each dollar spent another dollar or more of economic activity is generated.

In other words, as new workers are hired by Volkswagen and OEM suppliers, that’s more money to be spent on food, clothing, cars, entertainment and so forth, a ripple effect that underscores why your own state’s governor and politicians are eager to land car manufacturers.


See Also

Now Hiring: Volkswagen Adding 2,000 New Jobs in Tennessee

Big-Time Hit: 2018 Volkswagen Atlas SUV

Steady as She Goes: 2018 Volkswagen Passat


Photos courtesy of the Volkswagen Group of America.

Filed Under: Automotive News Tagged With: CHATTANOOGA, ECONOMY, EMPLOYMENT, JOBS, KNOXVILLE, TAXES, TENNESSEE, UNIVERSITY OF TENNESSEE, Volkswagen

Now Hiring: Volkswagen Adding 2,000 New Jobs in Tennessee

March 3, 2015 by admin 1 Comment

Volkswagen is on pace to become the world’s most productive car manufacturer, a goal it should attain this year. Its US sales have performed poorly, due in large part to a dearth of alluring models. A new, 7-passenger crossover utility vehicle may help reverse its North American fortunes, with production commencing in Tennessee by late 2016. Furthermore, that Chattanooga assembly plant is currently under expansion and new workers are being hired to supplement the current staff of 2,400 Volkswagen employees.

New Hires for Chattanooga, Tennessee

The Volkswagen Group of America plans to hire 2,000 new workers at its manufacturing plant near Chattanooga, Tennessee, as it expands that manufactory to accommodate a new, 7-passenger crossover utility vehicle. The plant, Volkswagen’s only manufacturing facility in the United States, currently builds the midsize Passat sedan. Because of the expansion, the automaker will hire 2,000 new workers as confirmed late last month.

The plant expansion, underway since January, will add square footage to the existing body and paint shops as well as to the assembly line. At present, the facility occupies nearly 2 million square feet and has a maximum build capacity of 150,000 vehicles. For this reason, an additional 512,886 square feet will be added to welcome the new SUV.

The Chattanooga expansion is part of a $900 million Volkswagen Group of America investment, what includes $600 million for its Tennessee operations alone. Besides adding a second paint line with robots, tanks, and pumps, and increasing the square footage of its others key shops, the company is building a new visitors center to be located in downtown Chattanooga. That center is expected to open in summer 2016.

***See Also — Diesel Hybrid: Volkswagen CrossBlue SUV Concept***

Engineer Hiring Underway

Volkswagen CrossBlue Concept

The Volkswagen CrossBlue Concept is a production reality.

Hiring for as many as 200 engineers is currently underway in Chattanooga. The company’s National Engineering and Planning Center have already established a temporary base adjacent to the factory, headed by Dr. Matthias Erb. Consequently, the center “will serve as a high-level research and development hub and will house product-related functions such as technical scouting, innovation management, and product management,” explained Volkswagen in a related press release.

Since opening in 2011, the Chattanooga plant has assembled a US-spec Volkswagen Passat midsize sedan. That five-passenger, front-wheel drive model has had to battle formidable competition, including the Toyota Camry, Honda Accord, Nissan Altima, Ford Fusion, as well as the Hyundai Sonata and other sedans. Thus, its sales have fallen short of projections, with just 96,649 units sold in 2014, down 11.9 percent from 2013.

Passat Update; CrossBlue Anticipation

Despite the Passat’s lagging fortunes, Volkswagen has a mid-product-cycle upgrade planned to commence this summer and in time for the 2016 model year. That upgrade should deliver an emotive design, one better suited to take on the likes of the Ford Fusion and Honda’s Accord. In this case, we are likely to see a model that is refreshed inside and out, with its gasoline and diesel powertrain options continuing intact.

The new model, based on the CrossBlue concept, will be manufactured on the company’s mid-sized MQB or modular platform, offer three rows of seating, and carry seven people. Moreover, the CrossBlue will be powered by a turbocharged diesel 3.0-liter inline-six engine, as part of a plug-in hybrid system with a pair of electric motors and a 6-speed dual-clutch transmission. Notably, this model is expected to produce more than 500 horsepower and have a total range of about 660 miles. Likewise, a 14-mile electric-only range has been projected.

Inside, the Volkswagen CrossBlue (Volkswagen Atlas) will feature a 10.2-inch touchscreen color display, controlling all infotainment functions as well as the hybrid system’s status. The concept vehicle, presented at the 2013 North American International Auto Show in Detroit, integrated iPad mini devices in the back of the front-row head restraints. In addition, Volkswagen plans to include a Fender Premium audio system and offer localized climate control for both second- and third-row passengers.

Grand Debut in 2016

Likely, full details about the Volkswagen CrossBlue won’t be released until it is formally presented at a major US auto show in early 2016. Detroit seems like a logical venue for that presentation.


See Also — Big-Time Hit: 2018 Volkswagen Atlas SUV

Photo courtesy of the Volkswagen Group of America, Inc.

Filed Under: Automotive News Tagged With: CHATTANOOGA, CONCEPT VEHICLE, HIRING, hybrid, JOBS, PHEV, SUV, TENNESSEE, Volkswagen Atlas, VOLKSWAGEN CROSSBLUE, Volkswagen Passat, VW, WORKERS

Volkswagen Expands Tennessee Investment, Adds New Model

July 15, 2014 by admin Leave a Comment

Volkswagen CrossBlue Concept to Become a Reality

Volkswagen CrossBlue Concept -- Tennessee

Concept vehicle to become a 2017 model year reality.

The Volkswagen Group announced on Monday a commitment to build a new midsize sport utility vehicle at its sole US manufacturing plant. The automaker said that it will invest $900 million to expand its Chattanooga, Tennessee, production facility and add up to 2,000 new jobs. The company has committed to take its Volkswagen CrossBlue Concept vehicle to production, although the model’s final name has yet to be determined.

Volkswagen announced its news from Wolfsburg early on Monday afternoon. However, the press conference was fairly muted even from German standards, likely the result of the country having won the 2014 FIFA World Cup in Brazil late the night before local time. That victory was alluded to during the press conference.

Chattanooga, Tennessee, Wins Out

Word that Volkswagen would green light CrossBlue production had been expected for days, if not weeks. What wasn’t clear was where the SUV would be built. Mexico was under consideration, given its lower labor cost edge. The CrossBlue, like the Passat, was designed for the North American market and either location would have been suitable.

Alas, an important push by Tennessee officials including Chattanooga’s mayor, Hamilton County officials and its two US senators helped move the needle toward the Volunteer State. Not to mention various tax abatements and other incentives that were offered to entice Volkswagen.

Christian Koch, CEO and Chairman of Volkswagen Group of America Chattanooga Operations, said: “We are proud to be making the new midsize SUV here. This is fantastic news for the plant and proof of the confidence placed in the workforce that does a great job here making high-quality cars every day.”

Late 2016 Production Plans

Production of the new model is expected to begin in late 2016, joining the US-specification Passat as the only two models that Volkswagen builds in the United States. Audi and Porsche, two other Volkswagen Group brands with an American presence, do not build their models stateside although an Audi plant is now under construction in Mexico.

Volkswagen’s decision followed a hard-fought unionization battle that ended in defeat for the United Auto Workers. Even so, the UAW took the unusual move last week to form a union local that is not recognized by Volkswagen.

Besides the plant expansion, what will be integrated into the plant’s existing structure, Volkswagen says that it will also invest in a new, independent National Research Development and Planning Center. The center will provide much-needed project coordination in the North American market.

The US market has been an especially tough one for the Volkswagen brand to crack. However, by building proprietary models such as the Passat and the CrossBlue, the company has shown much willingness to address local needs specifically.

From Concept to Reality

The Volkswagen CrossBlue Concept made its debut at the 2013 North American International Auto Show in Detroit. The concept was outfitted with a 2.0-liter turbocharged diesel engine and a hybrid drive system. It also featured a six-speed dual clutch transmission and two electric motors, one at each axle. Total power came in at an estimated at 305 horsepower with a whopping 516 foot-pounds of twist.

What the seven passenger SUV will bring to the US market may be different, however. Volkswagen could offer gas and diesel variant and provide a hybrid diesel as an option.

In whatever ways the new utility vehicle is served up, it could give Volkswagen much needed traction in a market where company sales are down 7 percent year to date.


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Photo courtesy of Volkswagen Group of America.

Filed Under: Automotive News Tagged With: 2017 MODELS, CHATTANOOGA, CONCEPT VEHICLE, SUV, TENNESSEE, Volkswagen, VOLKSWAGEN CROSSBLUE

Volkswagen Cultivates Tennessee Investment

July 1, 2013 by admin Leave a Comment

Chattanooga, Tenn., may be the center of Volkswagen’s U.S. manufacturing strength, but the German automaker is also invested elsewhere in the Volunteer State.

In March 2012 Auto Trends reported that Volkswagen had announced plans to open a new distribution facility in Roane County, Tenn., some 90 minutes northeast of Chattanooga. That approximate 460,000 square-foot facility opened on June 25, 2013, a $40 million investment that is expected to bring dozens of jobs to the area by 2016.

Volkswagen CrossBlue Tennessee

Will Volkswagen give its CrossBlue a production go?

 

Volkswagen Chattanooga, Tennessee

Volkswagen’s Chattanooga plant, however, is by far the largest contributor of VW jobs in Tennessee, with 12,400 full-time positions at Volkswagen, with its suppliers and all across the state’s economy. That is one of the findings of a University of Tennessee at Knoxville research study that also shows the company is responsible for $643.1 million in annual income and has contributed $53.5 million annually in local and state tax revenue.

Directly, Volkswagen has created 2,415 jobs and 9.985 jobs indirectly through its supply base and other companies. Volkswagen says that 17 automotive supply companies have set up shop in Tennessee to support its plant.

Volkswagen CrossBlue Coupe

The Chattanooga plant is tasked with building just one model: the midsize Volkswagen Passat sedan. That model is Volkswagen’s second most popular one (Jetta is No. 1) and will soon fill out Chattanooga’s current 150,000 per year build capacity. No other model is built there at present, but the company is expected to announce a major expansion to its $1 billion facility to allow for a second one. That announcement may come as early as Fall 2013.

That second model will most likely be based on the Volkswagen CrossBlue Concept SUV, a vehicle that made its debut at the 2013 North American International Auto Show in Detroit this Jan. That vehicle is a six- to seven-passenger crossover that would slot between the Tiguan and Touareg, filling an important gap in Volkswagen’s U.S. line up.

Unlike most hybrids, the CrossBlue would feature both diesel and electric power sources, with a pair of electric motors — one in the front and one in the back — supplementing the diesel engine to deliver a net 305 horsepower and 516 foot-pounds of torque. When operating in diesel mode this model should average 35 mpg, reaching 89 mpge in electric-only mode.

Number One Automaker

Volkswagen has not confirmed that the CrossBlue has been green-lighted for production nor has it identified the model it would add to Chattanooga. The CrossBlue would most likely be a niche model, at least from the outset, with perhaps fewer than 20,000 units sold annually. That means Volkswagen could limit the plant’s expansion to cover projected demand or simply double the plant’s capacity to anticipate increased product build and demand going forward.

It is no secret that Volkswagen desires to assume the mantle of most prolific automotive producer by 2018, a goal that might be reached as early as this year. Chattanooga is playing a small, but important part in helping Volkswagen reach its goal, while also underscoring to American consumers that its Tennessee investment is a sure one.


Related Reading

About the 2014 Volkswagen Passat

First Impressions of the Second-Generation Volkswagen Tiguan

Big-Time Hit: 2018 Volkswagen Atlas SUV

Hot Hatch: 2017 Volkswagen Golf R

Photo courtesy of Volkswagen of America.

Filed Under: Automotive News Tagged With: CHATTANOOGA, TENNESSEE, Volkswagen, VOLKSWAGEN CROSSBLUE CONCEPT, Volkswagen Passat, VW

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