The automotive sector in the Chattanooga region has experienced a momentous transformation in recent years, evolving from virtually non-existent to a major player in the automotive economy. The surge in the automotive industry was largely attributed to Volkswagen’s decision to establish an assembly plant in the city in 2008, which has since become a significant contributor to the region’s economic growth.
The Volkswagen plant in Chattanooga has flourished into a major operation, currently employing 5,500 workers and producing popular SUV models such as the Atlas, Atlas Cross Sport, and the ID.4. In addition to the Volkswagen plant, a network of suppliers has also established a presence in the region, with many of them located in close proximity to the Chattanooga plant. These suppliers, including Gestamp, Plastic Omnium, and Sese, have set up substantial operations near the VW factory, creating thousands of additional job opportunities in the area.
The importance of the automotive industry in Southeast Tennessee cannot be underestimated. The state of Tennessee is home to 900 automotive suppliers, providing employment to nearly 143,000 individuals for four automakers. Furthermore, the state’s production output is set to expand with the launch of the Ford Motor Blue Oval City production campus in 2025, signifying continued growth and development in the region’s automotive sector.
Shawn Fain, president of the United Auto Workers, has expressed optimism following the union’s victory at Volkswagen Chattanooga, citing it as a significant milestone in the effort to unionize additional factories. Fain believes that the successful unionization at Volkswagen Chattanooga serves as a testament to the potential for organizing efforts in the South and hopes to encourage more workers to consider the benefits of union representation.
Pablo Di Si, the CEO of Volkswagen Group of America, has also conveyed confidence in the company’s growth prospects, particularly with the production of electric vehicles such as the ID.4 in Chattanooga. Di Si anticipates a substantial increase in plant production, driven in part by the enhanced 2024 version of the battery-powered SUV.
In light of the growing significance of electric vehicles in the automotive industry, Alan Amici, CEO of the Center for Automotive Research, has highlighted the potential for explosive growth in the EV segment in the coming years. Amici anticipates that electric vehicle adoption in the US could reach 35% to 39% by 2032, underscoring the evolving landscape of the automotive industry.
Meanwhile, David Korda, operations director at Nokian Tyres’ Dayton, Tennessee plant, has expressed the company’s commitment to expanding its market share in North America and emphasized the importance of long-term planning to accommodate the company’s growth. Korda highlighted key considerations such as workforce needs, community development, and sustainability as integral to the future success of Nokian Tyres in the region.
The future of Chattanooga’s automotive industry appears poised for continued growth and expansion, driven by innovation, investment, and a commitment to sustainable practices. As the region cements its position as a hub for automotive manufacturing and innovation, it is evident that the automotive industry will play a significant role in shaping the economic landscape of Chattanooga and beyond.