VW picks Tennessee

Production of sedans at Chattanooga industrial park to start in early 2011

Email | Print By Geert De Lombaerde and Ken Whitehouse

Volkswagen has chosen Chattanooga's Enterprise South Industrial Park as the site of its first U.S. manufacturing plant.

The German automaker picked Tennessee over Alabama and Michigan and will invest close to $1 billion in the plant. It is expected to employ about 2,000 people and go live in early 2011.

"Today’s decision is a fundamental part of our new strategic direction in the U.S.,” said Stefan Jacoby, President and CEO of Volkswagen Group of America. “Chattanooga is an excellent fit for the Volkswagen culture, having an exceptional quality of life and a long manufacturing tradition.”

The Chattanooga plant will initially produce 150,000 midsized sedans per year. Volkswagen aims to sell 800,000 vehicles annually in the United States by 2018, up from about 300,000 last year.

“I’m enormously pleased by the announcement from Volkswagen Group of America and grateful for the company’s investment in Chattanooga and in the people of Tennessee,” said Gov. Phil Bredesen. “This project will have a significant impact on the economy of Tennessee and the region for decades to come.”

Other state elected officials also have responded to this morning's news:

"Through twists and turns, our community has maintained focus, invested wisely and exercised tremendous effort and energy in recruiting a major employer to Enterprise South. The breaking of this final barrier and the realization of the vision to which we have held true will take us to levels we can only begin to imagine," said U.S Sen. Bob Corker, who was mayor of Chattanooga when the infrastructure that established Enterprise South was built.

U.S. Sen. Lamar Alexander praised Volkswagen's decision to locate at Enterprise South saying, "Volkswagen and Chattanooga, the ideal marriage: one of the world's most admired companies and one of America's most livable cities. This decision keeps Tennessee on the road to becoming the number one state in auto jobs. Congratulations especially to Governor Bredesen, Senator Corker and Mayors Ramsey and Littlefield for their leadership."

"It was just a matter of time before a major auto manufacturer decided to locate at Enterprise South – and our time has arrived," said Congressman Zach Wamp. "This new partnership with Volkswagen showcases Chattanooga's position as a manufacturing giant in the Tennessee Valley Technology Corridor. Our city is home to the National Center for Computational Engineering and is surrounded by major research centers like the Oak Ridge National Laboratory. As a result, Volkswagen will benefit from Chattanooga's high-skilled, educated workforce, the region's research capabilities and technical innovations and our incredible quality of life."

For the full press release from VW and the state, click here. For Bloomberg's take on the story, click here.