Volkswagen's New U.S. Plant in Chattanooga Moves Forward

While much of the country wonders when the recession will end, one city appears to have the answer for its economic downturn. A year from now, Chattanooga, Tennessee's Volkswagen plant and its various suppliers will create thousands of jobs that don't exist today.

A year ago this month, the Germany automaker revealed plans to build a billion dollar plant in the Scenic City. Over that period, VW has backed up that claim by issuing $435 million in contracts relating to plant construction. "And that includes about $198 million spent by Volkswagen, the city, and state for plant construction and another $230 million over the next 20 years for plant construction," says April Wortham, a Volkswagen Community Relations Specialist.

Tennessee's unemployment level sat at 10.8% in June, over a percentage point higher than the national average. But, Chattanooga has fared better, hovering in the lower 9% range. Part of that reason is the construction now underway on the VW plant, and the hiring of human resources agents to oversee hiring for the plant. Wortham says "late last month we brought on our 100th local employee in Chattanooga and in this economy that's a pretty significant number."

According to a study conducted by the University of Tennessee Center for Business and Economic Research, the Chattanooga plant will generate $12 billion in income growth and an additional 9,500 jobs over the life of the project.

The plant will consist of 4 main buildings. The paint shop, which construction started on first, is now more than 50% complete. Work on the body shop, assembly shop, and training center is also underway, with a goal of being weather tight before fall.

Once that happens, Volkswagen will begin the process of filling hourly positions for production and maintenance. The automaker plans to start accepting applications for those jobs in late 2009, with hiring set to begin in early 2010.

"Our project in Chattanooga is made up of four pillars - the plant, the product, our suppliers and our people. We are committed to hiring locally, and we are convinced that we will have a best-in-class workforce," said Hans-Herbert Jagla, Executive Vice President, Human Resources, for the Chattanooga Operations.

Volkswagen will produce a new midsized sedan for the U.S. market at its Chattanooga plant. The facility will produce 150,000 vehicles annually once it opens in early 2011. But could that just be a starting point?

"We are building into this plant the flexibility to expand to up to 300,000 vehicles, so our goal is to sell 800,000 Volkswagens in the U.S. market by 2018," says Wortham.