After a diesel emissions scandal that cost Volkswagen billions in fines and slumping sales of its Chattanooga-made Passat sedan, Tennessee lawmakers (who have granted the automaker hundreds of millions of dollars in incentives to build and expand Chattanooga's VW plant) worried about the future of their investment, because Volkswagen was looking to cut back on certain operations.
Now things are looking up. Volkswagen's new Chattanooga-made, seven-passenger Atlas SUV is selling so well that the company plans to start building a new five-seater model, which means VW will put $340 million toward expanding the plant.
"What they're doing as far as ramping up their operations, we anticipate there'll be additional jobs," said Hamilton County Mayor Jim Coppinger, although the company isn't yet saying how many--if any--new jobs will be created.
Volkswagen North America CEO Hinrich Woebcken says, for him, the success of the Atlas symbolizes a "turnaround for our brand here in the United States."
Television commercials for the Volkswagen Atlas, the company’s new SUV, emphasize how big the vehicle is.
NARRATOR IN TV COMMERICAL: Introducing the all-new 7-seater Volkswagen Atlas. Life’s as big as you make it. :07
The German automaker designed the Atlas specifically for the American market. It’s made right here in Chattanooga, Tennessee, at their only United States assembly plant, which has been producing cars since 2011. A few years ago, the company invested nearly a billion dollars to expand the plant here and start making Atlases.
The investment seems to be paying off. Hinrich Woebcken is the CEO of the North American region for the German automaker. Monday, he announced…
Woebckn: We will begin assembling yet another SUV for the American market and we will do so right here in Chattanooga (applause) :13
It’s another Atlas model. Not quite so big as the current one. The new Atlas will be a five-seater. The CEO’s announcement happened at a press conference at the VW Chattanooga plant. Local and state officials joined him, including Tennessee Governor Bill Haslam. They spoke standing beside a framed concept sketch of the smaller Atlas. It was a sneak peek.
HASLAM: They were actually not even gonna announce it until the New York auto show in a couple of weeks. But I think a lot of us said, Chattanooga is such an important part of your brand here. Why don't you do the first announcement here, and you can show the exact look in New York a little later? :13
Haslam also talked about incentives. Over the years, VW has received a lot in taxpayer-funded incentives, nearly 800 million dollars, in exchange for VW building the plant here, creating jobs, and expanding a few years ago.
This newest expansion was announced without new incentives to sweeten the deal.
But officials were anticipating it anyway.
HASLAM: When we did the deal that brought atlas here, they didn’t promise us the second line would come, but it was obviously more than a twinkle in everybody's eye. :11
This is renewed optimism for government and Volkswagen officials, after a rough period for the automaker. Sales of the Passat sedan, made here in Chattanooga, have slowed, after the so-called Dieselgate scandal. In 2015 and 16, that was one of the main reasons Volkswagen was in the news…
SIEGEL (ARCHIVED BROADCAST): A federal judge has approved a nearly $15 billion settlement between the carmaker Volkswagen and the U.S. government and consumers. Just over a year ago, VW admitted it installed software on its diesel vehicles that cheated on emissions tests. :20
That was NPR’s Robert Siegel, reporting back in 2016. At the time, Volkswagen assured Chattanooga officials the company would continue investing and expanding here, even as it looked to cut back in other parts of the world. This new Atlas announcement confirms it.
Jim Coppinger is the mayor of Hamilton County.
COPPINGER: Gonna be about $340,000,000 investment and generally coming with that and what they're doing as far as ramping up their operations, we anticipate there'll be additional jobs. :10
Volkswagen North America CEO Hinrich Woebcken says, for him, the success of the Atlas symbolizes a turnaround.
WOEBCKEN: A turnaround for our brand here in the United States. :05
The new five-seat version of Volkswagen’s Atlas SUV will debut at the New York Auto Show, which starts at the end of March. For WUTC, I’m Michael Edward Miller.