Best of business 2014: VW creates 2,000 jobs; UAW gains ground

Best of business 2014: VW creates 2,000 jobs; UAW gains ground

December 31st, 2014 by Mike Pare in Business Around the Region

This story is part of a series on 2014's top business stories.

Six years to the day after revealing plans to locate its U.S. assembly plant in Chattanooga, Volkswagen officials unveiled a $900 million expansion that will create 2,000 more jobs to make a new midsize sport utility vehicle.

VW plans to show off another potential new model that may be produced here - a smaller SUV concept - at the Detroit auto show next month.

The additional vehicle offerings are intended to help the German automaker gain a bigger share of the U.S. market after sales of the Chattanooga-made Passat slowed in 2014.

The new midsize SUV is expected to roll off the assembly line for the 2017 model year. But it has already helped spur more suppliers to invest in the region, including the announcement in May by Plastic Omnium of a $70 million parts plant that will eventually employ 300 workers.

Martin Winterkorn, VW's chief executive, said plans are to make the seven-seat SUV off of the CrossBlue concept that was shown at the 2013 Detroit auto show.

"The USA remains one of the most important markets for the VW brand," he said.

VW, in addition to unveiling plans to assemble the midsize SUV by late 2016, will build a new research and development center that will employ 200 in Chattanooga. And VW is slated to put a new welcome center in downtown Chattanooga.

VW's Chattanooga plant, which began manufacturing the Passat sedan in 2011, already employs about 2,400 people.

Gov. Bill Haslam said the R&D center is "a new day" in Tennessee in that there will be more than just production jobs in Chattanooga.

"This speaks volumes for VW being as close to the customer at it can be," he said.

Christian Koch, who was named this year to head VW's Chattanooga operation, said the R&D center will house professionals with expertise in design.

The VW expansion comes as the United Auto Workers continues to try to organize the Chattanooga plant despite a 712-626 vote loss in a unionization election in February. The UAW has since formed a non-dues paying local and gained the right to meet with VW officials under a new company labor policy.

Gary Casteel, the UAW's secretary-treasurer, said VW's community engagement policy is "a step forward to building stronger relations between management and employees."

But the UAW is not the only labor group trying to represent VW workers in Chattanooga. The American Council of Employees, a rival group to the UAW, also endorsed the labor policy, igniting a renewed battle to gain official recognition from the automaker.

ACE Interim President Sean Moss said the policy will present employees with "a clear choice" between the local independent labor group he heads and the Detroit-based UAW.