VW finally turns its attention towards the US image

Volkswagen AG last year bested General Motors to become the second largest automaker in the world. While certain regions contributed to the rise, North America was not among them.

Especially the core Volkswagen brand has had a tumultuous recent history in the US, where its lone factory went through a workers’ vote to decide whether they want UAW representation. A positive outcome would have meant the union had a foothold in the anti-union US South, while VW executives would have gotten their proposed German style-works council that includes both white and blue-collar employees. The UAW lost the ballot – amid a rising scandal that also involved several political figures and rumored financial packages to settle the deal one way or another.

“I admit that we may have dedicated too much time to China, Brazil and other states because the U.S. appeared to be working extremely well,” said Chief Executive Martin Winterkorn. “The VW brand is going on the attack again in the U.S.,” he added. “The United States will remain one of the most important markets for VW.”

Now, Volkswagen finally announced its plans to invest $900 million at the Chattanooga, Tennessee manufacturing facility to prepare it for the introduction of a new, US-specific mid-sized SUV. The production plans, which would cause the factory workforce to nearly double, are a key part of the strategy to finally turn around ailing sales of the core Volkswagen brand. Last year, its sales in the country were down 7%, while the first six months of the year saw a further 13% dip.