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VW pledges to expand Chattanooga plant, keep momentum on SUV
A state Senate panel put its stamp of approval on Volkswagen and its Chattanooga plant Thursday in the wake of the diesel emissions cheating scandal by the carmaker.
Legislators seemed satisfied by what they heard in a rare local hearing that sought to determine how, if at all, the revelations would affect the plant's production and its hiring plans. Legislators also were assured of clawback measures for the state's investment should the company not follow through with its plans.
The VW plant currently employs nearly 2,500 people and announced plans in 2014 to add another 2,000 jobs as it builds a new crossover vehicle, tentatively named the CrossBlue, here by early 2017.
However, revelations that the emissions problem affects 11 million vehicles worldwide, including nearly 500,000 in the United States, caused the company to lose $1.83 billion in the third quarter of this year.
Thankfully, for current and future Chattanooga employees as well as local suppliers, VW said the local plant remains "a vital pillar" in its future. In fact, Christian Koch, president and chief executive officer of Volkswagen Group of America, said the plant's expansion could support a possible hybrid or electric version of the crossover.
Currently, in the United States, VW sells only hybrid versions of its Jetta and Touareg and only the e-Golf electric model. Through 2014 models, the company had sold only 7,756 Jetta hybrids and 788 Touareg hybrids in the U.S., and through September of this year, only 2,912 e-Golf models.
That could change if VW decides to decrease its diesel presence in the U.S. and ramp up hybrid or electric models. Diesel engines produce more nitrogen oxide than their gasoline counterparts and diesel fuel is more expensive than gasoline, but, according to the executive director of the Diesel Technology Forum, diesel engines are 30 percent more efficient than gas engines.
However, hybrids, while now more expensive than diesel models, provide even more fuel economy than diesels. In the near future, according to experts, the cost curves of diesel and hybrids will cross, with hybrids claiming the upper hand. Where VW is when those lines intersect may help determine its future.
If Chattanooga can play a part in that, with a potential hybrid or electric CrossBlue, all the better.