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Volkswagen Announces Plan to Open Plant in Chattanooga

Atlanta, GA 7/16/2008 1:39:49 AM

Volkswagen announced Monday that the German automaker has chosen Chattanooga, Tennessee for the site of its new plant.

Volkswagen selected Chattanooga as its new vehicle manufacturing site over locations in north Alabama and Michigan. The company expects to draw employees from Georgia, Tennessee and Alabama.

VW is expected to invest at least $1 billion into the plant, which is expected to add 2,000 employees and initially build a mid-sized sedan developed for the U.S.

The Chattanooga plant will have an initial annual capacity of 150,000 vehicles and will include body production, a paint shop and assembly operations, according to news reports.

The plant will be VW's first American plant since it closed its factory in Westmoreland County, Pennsylvania, in 1988.

VW stock rose 3.98 euros, or 2.3 percent, to 174.23 euros in Frankfurt. The stock has gained 12 percent this year, valuing the automaker at 59.8 billion euros ($95.2 billion).

Volkswagen is the world's fourth-biggest carmaker, behind General Motors Corp., Toyota and Ford Motor Co.

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