Volkswagen R&D center ramping up in Chattanooga, official says

We're getting ready for our next phase of growth."

Martin Winterkorn, left, Chairman of the board of management of Volkswagen AG, and Heinz-Jakob Neuber, left, Member of the board of management for the Volkswagen brand introduce the Volkswagen Cross Coupe GTE Concept at media previews for the North American International Auto Show in Detroit on Sunday.

DETROIT -- Volkswagen's planned new research, design and planning center for North America is starting to ramp up in Chattanooga, a top VW official said Monday.

"It's very important," said Michael Horn, Volkswagen Group of America's chief executive, about the National Research & Development and Planning Center that's expected to add 200 engineering-type jobs in Chattanooga.

The first few people will likely come from Germany, Canada or Mexico, and then the center will build its staff over time, he said at the North American International Auto Show.

"No longer will people be sitting in [VW's German headquarters] in Wolfsburg and product planning" for the North American market," Horn said. "We'll bring our own business case to the table."

VW is expected to use an existing building at Enterprise South industrial park in Chattanooga until a new facility is built near the production plant.

The German car maker is investing $900 million, including $600 million in Chattanooga, to expand the plant to build a new midsize sport utility vehicle as well as set up the R&D center. It's also slated to hire 2,000 more workers.

Martin Winterkorn, Volkswagen's CEO, cited the need for the R&D facility.

He said the 200 engineers will "focus entirely on the needs of U.S. drivers."

"We're getting ready for our next phase of growth," Winterkorn said.

Horn said the R&D facility will "move us much closer to the market" as well as provide the company "more firepower" to help VW know American tastes.

He said that while VW has a couple of hundred engineers in Mexico, it has no such operations in Chattanooga.

The VW official said the engineering and development staff will help create "derivatives" to existing or planned vehicles. He mentioned the Cross Coupe GTE, which was unwrapped here on Sunday and may be produced in Chattanooga.

Chattanooga's Volkswagen plant

Already, Horn said, he's on a panel of VW officials that's meeting regularly with Wolfsburg executives to improve decision-making in North America.

Chattanooga Mayor Andy Berke has said he's hopeful that a piece of the R&D facility can have a presence in a proposed innovation district downtown, though how that would work is unclear at this point.

The automotive R&D center will be a first for Tennessee. The research center is expected to help the Chattanooga area woo more suppliers - and jobs - as companies will try to integrate their products to VW's new parts designs.

"Tennessee is known for manufacturing automobiles but it hasn't established the research and development process," Gov. Bill Haslam said last year when the R&D facility was first announced. "It's a new day in Tennessee in terms of innovation."

He said the center "speaks volumes for VW being as close to the customer as it can be."

The Tennessee Automotive Manufacturers Association said the research center signifies a step forward in moving the state's auto industry up the value-chain as it tries to move from a world-class center for production to a hub for innovation excellence.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.