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Volkswagen Announces New SUV Line for Chattanooga

Volkswagen has announced that Tennessee will be home to its new SUV production line, representing a $600 million investment in the Volunteer State that’s expected to generate 2,000 more jobs at the company’s Chattanooga plant.

The automaker’s decision, which includes plans to establish a new strategic marketing and research facility in Tennessee, comes on the heels of an announcement by the United Auto Workers union that it would be opening an office for a voluntary chapter at the Southeast Tennessee VW plant.

“The impact of this announcement goes far beyond the 2,000 new jobs because of the large multiplier effect of the automotive industry,” said Tennessee Gov. Bill Haslam, in a press release, “and adding an additional manufacturing line and the National Research & Development and Planning Center sends a clear signal that Tennessee can compete with anyone in the global marketplace.”

The press release from the Governor’s office also notes that the state is providing a $165.8 million grant for site development, infrastructure, equipment acquisition and construction costs, as well as a $12 million grant for new employee training.

Volkswagen Group of America has agreed to waive certain tax credits related to its expansion as part of the incentive package.

And some other leaders in Tennessee auto manufacturing supplies — such as Kim Ketchum, Magneti Marelli’s corporate director of business development  or James Adams with eSpin Technologies, Inc. — echoed the Governor’s point that VW’s decision to increase production could create more demand for vehicle parts and positively impact other areas of auto manufacturing across the state.

Others have expressed hope that the expansion will lead to more emphasis on STEM education in the Chattanooga region.

Volkswagen has also named global works council chairman Bernd Osterloh to the board of directors for it’s American auto group.

Political leaders and industry groups lauded the German automotive group’s decision to expand.

U.S. Senator Bob Corker, formerly Chattanooga’s mayor, reminisced about the day, “six years ago,” that he received a call from the Volkswagen board that Chattanooga was where they had decided to locate.

“Today’s announcement is a similar high point,” Corker said in a press release, “as VW’s significantly expanded presence means that thousands of more families will benefit from the good paying jobs being created at the plant.”

Tennessee Democratic Party Chairman Roy Herron praised former state senate colleague and current Chattanooga Mayor Andy Berke, as well as other city leaders and VW employees, for bringing the expansion and jobs to the state.

“We commend the management and workers at Volkswagen as well as Mayor Berke and other city and county leaders who persevered and brought these jobs despite Republican threats, attacks, and interference with the rights of this company and its workers,” Herron said.

The UAW’s secretary-treasurer, Gary Casteel, issued a statement Monday to congratulate Volkswagen, its employees and Tennesseans on the automaker’s expansion, and thank Haslam for extending the necessary incentives to make the expansion work.

“State officials assured the public and Volkswagen employees that the decision on incentives for Chattanooga would not be related to whether workers exercise their right to join a union, and they kept their promise,” Casteel said in the statement, as reported by WTVC in Chattanooga.

In the statement, Casteel also alleged that the autoworkers union’s decision to expand to the Scenic City played a part in the decision of the automaker. “The fact that the new line is being announced four days after the rollout of UAW Local 42 in Chattanooga reinforces the consensus that the UAW has reached with the company,” Casteel said.

The decision garnered national and international coverage from outlets such as the Associated Press, New York Times, Wall Street Journal, USA Today, Detroit Free Press, CNN, Reuters, Bloomberg, and Automotive News.

Press Releases

Magneti Marelli to Expand Pulaski Operation

Press Release from the Tennessee Department of Economic & Community Development; June 11, 2012:  

NASHVILLE – Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Bill Hagerty announced today that Magneti Marelli will expand its Pulaski outfit, a $53.7 million investment that will create 800 new jobs.

Magneti Marelli is a top global automotive systems and components supplier, and a new automotive lighting operation will be housed inside the company’s existing Pulaski facility.

“Congratulations to Magneti Marelli on this announcement,” Haslam said. “Our Jobs4TN economic development strategy includes strong emphasis on several industry clusters, such as the automotive industry, in which the state holds a distinct competitive advantage and on expanding existing Tennessee businesses. The addition of this lighting operation to the Pulaski site is welcome news to Giles County and the state.”

“This is great news for Pulaski, and I am grateful to the company for their continued confidence in our state,” Hagerty said. “This announcement is a testament to the exceptional workforce in Pulaski and the surrounding areas, and the creation of these new jobs will have a large impact on the residents of this area. With the strongest balance sheet in the United States, Tennessee stands out to global companies like Magneti Marelli who undertake a worldwide review in determining where to locate and expand their operation.”

Along with manufacturing sites in Juarez and Tepotzotlan, Mexico, the Pulaski operation rounds out the company’s lighting division. Magneti Marelli’s lighting division is one of the world leaders in the automotive lighting sector, having supplied about 20 million headlamps and about 22 million rearlamps to global carmakers in 2011.

“What a great day for the citizens of Giles County,” Janet Vanzant, county executive, said. “Today’s good news means jobs, and that is always good. Magneti Marelli has been a great corporate citizen for several years, and we all welcome this expansion. I want to thank the State of Tennessee, our local economic development office and all the other partners that contributed to the success of this project.”

“What a wonderful day in Pulaski,” Mayor Pat Ford said. “Magneti Marelli’s announcement today has to be the biggest economic development project in the history of Pulaski and the jobs that will be created are sorely needed. I want to thank Governor Haslam, Commissioner Hagerty and his staff for helping us with this project. Magneti Marelli is already is a valued member of our industrial family and I know the lighting division will be successful in our community.”

“Today’s announcement is good news for Giles County, but this project is going to have a very positive impact throughout all of southern middle Tennessee,” Dan Speer, executive director, Pulaski-Giles County Economic Development Council, said. “A great deal of hard work and cooperation went in to this project, and I too would like to thank Gov. Haslam, Commissioner Hagerty, along with the entire ECD staff, TVA and the local Workforce Development Board. Many people contributed to the success of this project, and I particularly would like to thank plant manager Kim Ketchum and her management team for their invaluable contributions.”

“TVA congratulates Magneti Marelli on their decision to locate a new automotive lighting manufacturing operation that expands its existing site in Pulaski,” said John Bradley, TVA senior vice president of economic development. “We are privileged to work with Magneti Marelli and economic development partners, including the State of Tennessee, PES Energize, City of Pulaski/Giles County leaders, to facilitate jobs growth.”

Magneti Marelli has 83 production units, 11 research and development centers and 26 application centers in 18 countries. Magneti Marelli’s 34,000 employees work on electronic systems; lighting; powertrain; suspension systems and shock absorbers; exhaust systems; plastic components and modules; and motorsport and aftermarket parts and services.