Volkswagen reaffirmed Wednesday plans to build a new SUV in Chattanooga in spite of the emissions scandal that threatens to cost the German automaker billions of dollars in fixes and lawsuits.
Michael Horn, president of Volkswagen Group of America, said in a statement that VW will hire an additional 2,000 workers and invest $600 million to develop a midsize SUV for the U.S. market. Production is scheduled for late 2016.
“The United States continues to be one of the most important markets for Volkswagen, and our commitment to Chattanooga and the state of Tennessee is clear proof of that,” Horn said. “The Chattanooga plant is a core part of our strategy in North America. Here and throughout the region, we will work toward meeting the demands of our U.S. customers and regaining their trust in the Volkswagen brand.”
Trust in VW was shattered last month when the automaker admitted to the U.S. Environmental Protection Agency that it had cheated on U.S. emissions tests. Roughly 11 million cars worldwide, including nearly 500,000 in the U.S., some built in Chattanooga, produced as much as 40 times the amount of pollution allowed by U.S. law.
EPA, the U.S. Justice Department and Congress are investigating VW. More than 300 lawsuits, mainly from drivers of diesel-engine cars, have been filed. Tennessee legislators are holding a hearing in Chattanooga on Thursday with VW executives to determine if the state’s nearly $1 billion in incentives and tax breaks given the automaker are in jeopardy.
It couldn’t be determined Thursday morning if the 2,400 workers at the Chattanooga factory will be impacted by the emissions scandal.
“We know we have a lot of hard work ahead of us, but this is a crucial moment in our efforts to deepen our commitment to America,” Christian Koch, president of Volkswagen Chattanooga, said Thursday.
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