Why Volkswagen Chose Chattanooga for its Sole U.S. Auto Assembly Plant
2,400 and growing
When Volkswagen began scouting a location for its sole U.S. auto assembly plant in January 2008, its site selection team kept one overarching goal in mind: choose a site that will bolster Volkswagen’s mission to become the No. 1 automaker in the world.
“Volkswagen is committed to becoming the world’s top automaker, yet when we began our search, we had no American manufacturing presence and only two percent of the U.S. market share,” said Hinrich Woebcken, President and CEO of Volkswagen Group of America, Inc. “We committed ourselves to finding a location where the local leadership and workforce would become our partners and truly help Volkswagen achieve its growth and sales goals.”
The company looked at more than 300 sites, but Chattanooga quickly rose to the top because of its skilled workforce and the proven ability of local and state leadership to partner with the automaker. In fact, before Volkswagen announced its commitment to select Chattanooga, local leadership had already begun prepping the site and air permitting.
In July 2008, Volkswagen announced that it had selected Chattanooga for its $1 billion, 1,400-acre assembly plant campus, which would be dedicated to developing and launching a new model Passat.
“It took six months to formally select a location for our U.S. plant, but we quickly knew Chattanooga was a top option when looking at different locations,” said Woebcken. “Chattanooga and Tennessee made the rollout as seamless as possible, from providing a construction-ready site to hiring and training new workers to building an on-site training school. We couldn’t have asked for better partners.”
Since the Chattanooga plant began production in April 2011, the site has proven to be a success by all measures. The Chattanooga-made Passat and the company’s workers won the 2012 Motor Trend Car of the Year, and Volkswagen Chattanooga now directly employs more than 2,400 workers. In September 2016, the company announced it would hire another 1,100 as it ramps up production of a new midsized SUV at the Chattanooga facility.
Volkswagen’s decision to locate in Chattanooga has also spurred a deep supplier network in the area, indirectly adding jobs into the region. A study by the University of Tennessee Center for Business found the company’s operations in Chattanooga have helped create more than 12,000 net new jobs with $643 million in annual payroll. Further, the company’s Chattanooga operations are expected to generate $12 billion in income growth, and another $1.4 billion in total tax revenues in the state.
“Volkswagen couldn’t be more thrilled with our Chattanooga operations,” said Mr. Woebcken. “From the ease of doing business to local and state leadership’s proven commitment to assist us whenever possible, we continue to enjoy the benefits of operating in Chattanooga.”
Volkswagen announced in 2019 a 750,000 square foot expansion and 1,000 new jobs manufacturing electric vehicles. The German automaker also plans to add a 564,000-square-foot addition to the body shop and an additional 198,000-square-foot facility adjacent to the factory for battery pack assembly.