VW Expands Chattanooga Plant

Some new milestones are being reached as Volkswagen builds its U.S. project in Chattanooga, in terms of the plant and the new car that will be built here.

The CEO and Chairman of Volkswagen Group of America Chattanooga Operations, Frank Fischer, said Friday "July was a very good month."

Fischer said since July last year VW sales are up 6.7% whereas the overall car market declined by 16%.

To keep up with demand for its cars and to keep on track with goals of becoming the world's number one car maker by volume, the U.S plant in Chattanooga is vital. Fischer said construction is on schedule and just recently plans were finalized to add another seven bays, or 43,000 square feet of manufacturing space.

"Another important decision has been made and this is because we want to have the whole factory, the whole plant, well prepared to increase capacity at a later time," Fischer said.

As work progresses to make the buildings weather tight by the end of the year 80% of the equipment needed inside to make cars has been awarded to contractors. Basic electric equipment for the buildings has been awarded too.

Work to find suppliers is moving at a feverish pace, especially for minority suppliers. VW has made that clear with its primary, or tier-1 suppliers, as they shop for companies to supply them.

"They need to have the same mindset and goals as what VW has in the Chattanooga area, " according to Tom Loafman, Volkswagen's director of purchasing.

The goal is to have at least 10% minority supplier participation.

Final negotiations are underway with contractors to build supplier park buildings on the north side of the auto plant. Fischer said seven potential suppliers have been identified.

All those parts will build what's now code-named the "NMS," the four-door sedan that will be built in Chattanooga. The designs of the "NMS" are set and 19 of 40 prototypes have been built in Germany. First test drives are scheduled for October.

Building a flagship plant and launching a new car model are mammoth projects that have overcome many financial and engineering obstacles.

"It is the most challenging project that we have in our group, and I think it is also the most challenging project Volkswagen has taken on in a long time," Fischer said.

In other recent developments Volkswagen has ended a bitter squabble with Porsche by acquiring the luxury high-performance brand, making it the tenth brand under it's worldwide wing. Porsche had executed some controversial moves in the last year in which they borrowed billions of dollars to buy a majority stake of VW stock. But Porsche was left struggling with the massive debt and it was VW that ultimately won the battle.

Volkswagen will begin selling it's newest model, the Jetta Sportwagen, in September and will offer various engines including the TDI clean diesel versions to power the sleek wagon. It will also feature a new front-end body design that was unveiled in Europe last year. 

After the plant buildings are completed around the end of the year hiring will begin for the production jobs at the Chattanooga plant in the first half of 2010. New cars are scheduled to roll off the assembly lines in the first half of 2011.

Fischer said VW officials in Germany are also considering other models to be produced in Chattanooga, possibly a new SUV.

Volkswagen is asking architectural students from five universities to compete in a contest to help design the pedestrian bridge that will link the training center and employee parking lot to the plant.

Students from the University of Tennessee at Chattanooga and Knoxville, the University of Memphis, Georgia Tech and Auburn University are in town meeting with VW's design team.

The bridge must handle thousands of workers and visitors on a daily basis and feature designs that reflect VW's core values.

Students have until December 7 to submit their plans.

"So I'm really excited about it and a little scared I have to say, because we have to cover a lot of structural and engineering issues as well," Georgia Tech senior Polya McCain said.

The winners will be announced in January and they will get thousands of dollars in prizes for contestants finishing in first, second and honorable mention positions.