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Study shows Volkswagen Chattanooga expansion could add 9,800 jobs and $370 million to the Tennessee economy

A University of Tennessee Center of Business and Economic Research (CBER) study released today indicates that the expansion of Volkswagen’s Chattanooga manufacturing facility to produce a new midsize-SUV and the opening of a North American Engineering and Planning Center could create approximately 9,800 jobs and add $370 million in additional annual income, once the plant is fully operational.

“The findings in the CBER study demonstrate that the incentive package recently passed by the Tennessee legislature will result in an economic growth multiplier of several times the state’s investment,” said David Geanacopoulos, Executive Vice President for Public Affairs and General Counsel, Volkswagen Group of America, Inc. “We would like to thank Gov. Bill Haslam and Economic and Community Development Commissioner Randy Boyd for their leadership in fostering a business environment within Tennessee that is mutually-beneficial for the state and local economy as well as for companies like Volkswagen that have operations in the state.”

In addition to the 2,400 Tennessee workers directly employed by Volkswagen, the study projects that Volkswagen’s $704 million investment in the Chattanooga plant expansion, including the opening of a new North American Engineering and Planning Center, has the potential to:

  • Generate $217 million of new income and more than 5,300 indirect and direct jobs in Tennessee during the construction and tooling phase
  • Create roughly 9,800 jobs, once the plant is fully operational, including 1,800 potential jobs at the production plant, 200 engineering jobs at the VW North American Engineering and Planning Center, as well as positions at auto parts suppliers, and other jobs throughout Tennessee
  • Be responsible for $370 million in additional annual income, once the plant is fully operational

“Extensive supplier linkages and good incomes earned by Volkswagen employees account for the significant employment gains and economic multiplier effects in Tennessee,” said William Fox, the study’s author and Director of the Center for Business & Economic Research at the University of Tennessee. “This includes jobs in many industries across the state, such as grocery stores, restaurants, shopping malls and construction.”

Construction for the Volkswagen Chattanooga expansion project is currently underway, and is expected to be completed during the summer of 2016. Production of the Volkswagen midsize-SUV is scheduled to commence at the end of 2016, marking the second Volkswagen model to be produced in Chattanooga, in addition to the Passat.

“The study underscores Volkswagen’s commitment to Tennessee, and we are excited to grow our team and the Chattanooga plant as we gear up for the production of our first-ever seven-passenger SUV for the U.S. market,” said Christian Koch, President and CEO, Volkswagen Chattanooga. “We appreciate our partnerships with Hamilton County Mayor Coppinger and Chattanooga Mayor Berke, as well as Governor Haslam, for their ongoing support of Volkswagen’s expansion in Chattanooga.”

The CBER study is commissioned by Volkswagen Group of America. Findings within the study are independent calculations by CBER researchers.

A full copy of the new study is available here: http://cber.haslam.utk.edu/pubs/bfox309.pdf.

CBER’s press release is available here: http://tntoday.utk.edu/.

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