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VW Continues U.S. Expansion

Warehouse project follows new factory opening.

by on Mar.14, 2012

The new VW warehouse will help support the production of the Americanized Passat at the maker's new Chattanooga assembly plant.

A confident Volkswagen Group of America is moving ahead with its brick and mortar expansion in the U.S. With production steadily ramping up at the maker’s new American assembly plant, the German maker will invest another $40 million to build a warehouse in Roane County, Tenn. for distributing domestic auto parts for the Chattanooga-made Passat.

The 400,000-square-foot facility is expected to open by spring 2013 and will employ up to 45 people by 2016.

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Though a relatively small investment compared to the roughly $1 billion Chattanooga plant, it underscores VW’s sharp shift in focus.  Ever since closing an older plant in Westmoreland, Pennsylvania, a quarter century ago, the maker had downplayed the U.S. market.  But company planners now see the States as essential to achieving their global growth targets – VW aiming to be the world’s largest automaker by 2018.


Low Pay Big Advantage as VW Opens New U.S. Plant

New factory could help Volkswagen double U.S. demand.

by on May.23, 2011

The first 2012 VW Passat will officially role off the maker's new assembly line in Chattanooga on Tuesday.

When Volkswagen opens its new U.S. assembly plant tomorrow, it will be a critical step in the maker’s plan to double sales by 2018 – in part by relying on low wages to help make models like the all-new 2012 Passat more competitive.

The average blue-collar worker at the new factory, Chattanooga, Tennessee, will earn just $27 an hour – including wages and benefits – or barely half the average $52 an hour for workers at Detroit’s union-organized plants.  VW will also have a significant cost advantage over other so-called transplant assembly lines operated by Japanese and other European makers.

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That could provide a significant boost for a company that has been saddled with a heavy premium on products imported from Germany, where high labor costs have been compounded by the weak U.S. dollar.

VW has been pressing hard to emphasize value – something that worked for the legendary Beetle nearly half a century ago – rather than focusing on German engineering as an excuse for higher prices.  When it launched an all-new Jetta, last year, it introduced a stripped-down model, the Jetta S, at just $15,995 — $2,000 lower than the starting price for the 2010 model.