Volkswagen AG’s new plant in Chattanooga, Tenn., will open this week. VW invested a total of $1 billion in this factory that’s expected to push the company to attain higher sales.
Kim Kill, the director of sustainability and economic development strategies at the Center for Automotive Research, said that VW is smart to take advantage of the U.S. recovery as it decided to continue the project. VW had actually revealed plans to build this plant in Tennessee in July 2008.
The Center said that carmakers have announced over $17 billion in factory investments for the U.S. and Canada since the start of 2010.
Earlier this month, General Motors has said that it will invest $2 billion. After Bloomberg compiled the average of 18 analysts' predictions, it stated that total sales of cars and light trucks may increase to 13 million this year. Last year, light-vehicles sales went up to 11.6 million after having had a 27-year low in 2009.
Mike Jackson, the head of North American vehicle forecasting at IHS Automotive in Northville, Mich., said that its ability to localize a significant amount of their volume will be effective at cutting costs and improving their ability to be more competitive.
VW believes that the United Auto Workers union may make an attempt to organize the workers in its new plant. UAW President Bob King had said that for this year, he aims to organize at least one non-union auto plant in the U.S. King has yet to name the companies that the union is targeting though.