The announcement comes just days after the United Auto Workers detailed plans to establish a local branch in the city, enabling the union to formally recruit workers as it attempts to build a majority and receive official representation. The initial unionization move had been a source of contention between VW and state legislators, potentially threatening a $300 million incentive package aimed at securing the SUV production.
Significant expansion to the Chattanooga facility will be required for the company’s second US-built model, which will be built alongside the Passat. The new model is expected to require $900 million in total investment, including $600 million heading to US shores.
VW claims approximately 2,000 jobs will be created as the plant ramps up production. Several hundred of the new positions will be at a new research-and-development center, aimed at coordinating projects optimized for the US market.
“With the midsize SUV, the expansion of the Chattanooga plant and the new development center, the focus is on the wishes of the US customer,” said VW CEO Dr. Martin Winterkorn. “This is also a strong signal for the US as an industrial and automobile production location. The Volkswagen brand is going on the attack again in America.”
The new SUV will be a midsize model based on the CrossBlue concept that debuted in 2013. Three-row seating for seven passengers has been confirmed for the production model, reflecting the focus on the North American market, though additional specs remain unclear.
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