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Volkswagen builds new factory in Tennessee as GM and Chrysler shutter theirs elsewhere

July 16, 7:43 AM

What a strange world. For the last six months, the headlines have been about General Motors and Chrysler shutting factories, getting rid of employees and dumping dealerships. And today I get a press release from Volkswagen reporting it has awarded more than $435 million in contracts for a brand new factory it is building in Tennessee.

So, the new factory that is not being built by General Motors or Chrysler will not pump billions into the hard-hit local economies of Michigan or Indiana, and will not provide nearly 10,000 new jobs. That’s all happening in Chattanooga, and wherever VW’s parts suppliers are located. Let’s hope some former GM and Chrysler suppliers can re-tool and supply for VW.

VW predicts this new production facility will generate $12 billion in income growth and an additional 9,500 jobs over the life of the project.

When the new factory opens in 2011, it will produce an all-new mid-size sedan designed specifically for the American market, which may or may not replace the award-winning Jetta sedan in the US. Award-winning because the Jettta TDI clean diesel won the Green Car of the Year award at the Los Angeles Auto Show in November 2008. VW’s Touareg TDI diesel SUV is a winner, too, including for its federal $1,150 tax credit for being clean, green and its impressive fuel economy.

VW promises that at least 10 percent of the suppliers for the production facility will be minority and women-owned businesses by start of production. Also, VW promises that five percent of parts and equipment suppliers will be minority and women-owned by start of production, with the goal of 10 percent by 2015. Volkswagen is working with local, state and federal organizations to help achieve that goal.

Volkswagen is the world's third largest automaker and the largest carmaker in Europe, and part of a family of famous brands that include Audi, Bentley, Bugatti and Lamborghini. Yes, VW owns Bentley, Bugatti and Lamborghini. And in negotiations to aquire Porsche, too.

Volkswagen Group of America is a wholly-owned subsidiary of the parent company, headquarted in Wolfsburg, Germany. The North American headquarters are in Herndon, Virginia. VW has 800 dealers in the United States, and they have not yanked the franchises of thousands of them and ordered them to take the name off the door in the last few months, as have General Motors and Chrysler.

As I said, what a strange world.

LINK:Volkswagen builds new factory in Tennessee as GM and Chrysler shutter theirs elsewhere
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