Volkswagen's Koch Testifies Before Tennessee Senate Sub-Committee

CHATTANOOGA, TN -- Oct. 29, 2015: Senator Watson, Senator McNally, Senator Tate, and members of the community, thank you for inviting me to be here today. I know that some of you have travelled across the state, and I certainly appreciate you being here. I’d like to especially thank Commissioner Boyd for being here today.

My name is Christian Koch, and I am the President and CEO of Volkswagen Group of America Chattanooga Operations. I have been with Volkswagen 25 years and I came to Chattanooga in 2014 from Germany, where I was a managing director for Volkswagen's operations in Saxony. Today, I am responsible for all matters relating to the Chattanooga factory.

As I am sure you are aware, the last several weeks have been trying times for Volkswagen and our hardworking employees around the globe, including thousands here in Tennessee.

As you know, our company has apologized to our customers and to the public. I am here today to personally extend that apology to you, and to our customers, our dealerships, our dedicated workforce, and the people of Tennessee. As a company, we take full responsibility for our actions, and we intend to make things right.

And I am also here today to tell you that we intend to honor our commitments here in Tennessee. Indeed, earlier today, my colleagues in Germany publicly reaffirmed the company’s commitment to our Chattanooga plant.

While Volkswagen is based in Germany, Tennessee is also our home – and for me and my family personally, Chattanooga is now our home. We are grateful that Tennessee, Hamilton County, and Chattanooga have been such welcoming partners. Our plans to keep the momentum going have not changed, even in the face of the emissions issue affecting some TDI vehicles.

I am here today to state to the Chattanooga community and hardworking people across the state that Volkswagen’s plans for expansion are on track.

Let me take a moment to review our existing facility and highlight some exciting areas of expansion, including the construction sites that will accommodate the new midsize SUV, which begins production late next year.

[Slide 1] First, I’m sure you’ll recognize this picture. We have already invested well over 1 billion dollars in our state-of-the-art facility here in Chattanooga. It employs more than 2,400 dedicated men and women and is platinum LEED certified. It truly is a vital pillar of Volkswagen’s future. This past summer, we celebrated having built 500,000 Passats here at the Chattanooga plant.

This facility is an economic engine in our community and across Tennessee. I am so proud of our hard working team.

[Slide 2] We’ve also contributed heavily to the state’s economy through our network of suppliers and dealerships across the state. According to a University of Tennessee study, Volkswagen Chattanooga supports more than 12,000 full-time jobs, including suppliers in 11 different counties across Tennessee. Recently, we attracted new investments and jobs from three major suppliers Gestamp, Plastic Omnium, and YanFeng.

[Slide 3] Our Parts Distribution Center in Roane County, seen here, employs more than 50 team members and supports the entire network of dealers across the country. The 40 million dollar, 459,000 square-foot facility also distributes auto parts to global markets. This facility is also another example of Volkswagen’s commitment to sustainability, as it too has obtained LEED certification.

[Slide 4] One point of particular pride is our Volkswagen Academy, by which we partner with local schools to prepare students for real-world employment. Working closely with Chattanooga State, UTC and Tennessee Tech—and with the support of the state of Tennessee—this innovative training center prepares the next generation of Tennesseans for a great career in the Chattanooga plant. The Volkswagen Academy features 19 classrooms with state-of-the-art academic technology and allows for hands-on training of all aspects of the manufacturing facility.

The Volkswagen Academy helps workers prepare mentally and physically. When they enter the plant they are already experts in their field—whether it is the body shop, paint shop or the assembly shop. It is just another example of Volkswagen investing in the future, and of a public-private partnership benefiting the whole community.

Indeed, Volkswagen has been investing in education since our arrival in Chattanooga. In addition to The Volkswagen Academy, we have invested over 6 million dollars in business and engineering programs at schools like UTK, UTC, and Oak Ridge.

As you can see, Volkswagen has already built a model facility here in Tennessee. Let me next highlight Volkswagen’s exciting plans to continue its investment in Chattanooga. First, we intend to honor the MOUs signed with the county, city, and state to expand the Chattanooga plant.

[Slide 5] And that commitment will continue to have a growing ripple effect on the Tennessee economy. A University of Tennessee study predicts the plant will generate nearly 10,000 new jobs over time and more than 372 million dollars of income each year, providing a tremendous economic boost to the region.

Let me provide you an overview of the expansion projects that are underway and on schedule.

[Slide 6]: This is a photo showing the newly completed Body Shop expansion which has been handed over to production. Equipment installation is currently underway to accommodate the new SUV line.

[Slide 7]: Here you see additional new construction on the Body Shop, where we are adding 149,000 square feet. Once completed, the body shop will have 25 percent more square footage.

[Slide 8] The Assembly Shop, Warehouse and Paint Shop are also under construction and will include a second automated production line in the Paint Shop when completed.

And our new North American Engineering and Planning Center continues to hire, and presently employs 72 professionals. The Center will serve as a high-level research and development facility. It will house product-related functions such as innovation and product management.

[Slide 9] As you can see, the expansion is underway at the plant, and exciting progress has already been made.

We are grateful Tennessee has been such a welcoming partner, and our plans to keep that momentum going have not changed. We look forward to creating even more high-quality jobs here in Tennessee with our plant expansion, which remains a priority.

We continue to invest in Tennessee because we believe there is a bright future ahead.

Over the past 60 years, Volkswagen has become part of American culture through classic vehicles and a commitment to automotive excellence. At its core, Volkswagen is the hard working and dedicated men and women, including all of us in Chattanooga, who strive every day to provide quality for our customers and strengthen our communities.

In closing, Volkswagen is committed to producing vehicles in Tennessee that make us all proud and that drive the economy forward—vehicles that Americans will want to purchase and drive, like our new and exciting mid-size SUV.

We are grateful to the state of Tennessee, Hamilton County and the City of Chattanooga, and we look forward to working closely with you in the years to come.

Thank you again for your invitation and I look forward to answering your questions.