Chattanooga: Assembly plant brings jobs, research and development

When Volkswagen completes its new assembly plant here in 2010 and begins building cars in 2011, the product will be as visionary and sustainable as the company’s new U.S. home, according to Stefan Jacoby, president and CEO of Volkswagen Group of America.

Bringing $1 billion worth of investment and creating 2,000 new jobs, VW will build a completely new vehicle “designed specifically for the United States,” Mr. Jacoby said.

“That is real,” he told a cheering Chattanooga crowd Tuesday.

The “core vision” of the city and his company helped VW “find an ideal home,” he said, to build its new mid-sized sedan with three optional engines — fuel-efficient conventional gasoline, hybrid and diesel.

“Even with the conventional gasoline engines, we can improve significantly on fuel consumption,” he said.

Initially, Volkswagen plans to make 150,000 of the new cars per year, Mr. Jacoby said. The car, as yet unnamed, will be about the size of the Passat and will be tailor-made for American consumers — highly competitive with all the goodies Volkswagen has to offer.

While the Chattanooga plant will assemble the cars from start to finish, it will not necessarily make all the parts that go into the construction, bringing in many from outside companies and suppliers.

The engines, for instance, will not be built here — or in Huntsville, the Southern runner-up for Volkswagen’s nod. Instead, they already are being made in the VW plant in Mexico.

VW will use local and North American suppliers here as much as possible, and Jacoby said he hopes that begins with the building of the plant “as soon as possible,” he said.

“Today the hard work starts,” he said.

Research and development for VW, too, is an ongoing objective at the new site.

“It’s one of the central parts,” Mr. Jacoby said.

Gov. Phil Bredesen, who flew into Chattanooga Tuesday morning for the announcement, said the VW investment will produce employment opportunities beyond the new jobs at the plant.

“This is just the tip of the iceberg,” he said.

Chattanooga’s metamorphosis from a dirty industrial city to one of the cleanest and greenest in the country is one of the factors that VW looked at when choosing a new plant site, he said.

“This city knows a little about partnership and of vision. Over the past 30 years you have overcome environmental challenges to become one of the top places to live in this country,” he said. “We are confident that the ways of this area complement our own.”