Volkswagen's Big Bet on Tennessee

Despite the industry's travails, the German automaker expects to boost U.S. sales with its $1 billion investment in a Chattanooga factory set to make midsize cars
An aerial shot of Volkswagen's Chattanooga, Tenn. manufacturing site. Volkswagen

Detroit carmakers may be fighting for survival, but further south in Chattanooga, the auto industry is still making at least two guys happy. They would be Ron Littlefield, mayor of the Tennessee city, and Claude Ramsey, mayor of the surrounding county. In July, they learned that German carmaker Volkswagen (VOWG.DE) had chosen Chattanooga as the site for a new U.S. factory that will produce a new midsize VW by 2011. As Littlefield said during a recent stopover in Frankfurt, "An auto plant is the holy grail of economic development."

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