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VW Will Build Big New SUV For U.S. In Chattanooga

UAW Fires Warning Shot That It Hasn’t Given Up.

“The VW brand is going on the offensive again in America. The company’s key weapon in its renewed onslaught: More SUVs”

Volkswagen finally opted to build its SUV for the U.S. market at the Chattanooga, Tenn. plant, a couple of days after the United Autoworkers Union(UAW) revealed that not only was it not going away after losing the recognition ballot, but it was ratcheting up its campaign, albeit slowly. 

The UAW suddenly dropped its plan to contest the lost recognition election at Volkswagen’s Chattanooga plant in April and made clear though that it hadn’t given up its long-term goal of gaining representation at VW in the U.S.

If the UAW had gained access to the plant, speculation suggested the VW SUV might be made in Mexico. In the event, VW announced in mid-July it would spend $900 million at the plant to build a seven-passenger sport utility vehicle there by late 2016, adding 2,000 new jobs. VW also said it was hiring 200 more U.S. engineering jobs at its new research and development centre in Tennessee and increasing the role of U.S. manufacturing in VW policy-making.

Analysts said this might help to turn around VW’s operation in the U.S. which is charged with reaching sales of 800,000 by 2018. After more than doubling sales to just under 450,000 between 2009 and 2012, VW brand sales fell seven per cent in 2013, and are down about 13 per cent in the first half of this year, compared with the same period last year.

“The VW brand is going on the offensive again in America. The company’s key weapon in its renewed onslaught: More SUVs,” CEO Martin Winterkorn told a presentation in Wolfsburg, according to the Wall Street Journal.

UAW branch
The new big VW SUV will compete against the likes of the Ford Explorer, Chevrolet Traverse and Dodge Durango.

A couple of days before the SUV announcement, the UAW said it will set up a union branch at the Chattanooga plant, despite losing the vote.

Automotive News columnist Gabe Nelson said this was part of a long-term plan by the UAW.

“Williams’ (UAW President) plan is this. Start with the devotees. Win over the doubters later. And it may be a blueprint for how the UAW will try to organise Southern plants owned by companies such as BMW, Mercedes-Benz and Nissan,” Nelson said.

 

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