DETROIT/BERLIN -- Volkswagen AG's $1 billion investment in a new factory in Tennessee, opening today, promises to boost sales as U.S. auto demand continues to recover from an almost three-decade low.
VW announced it would build the plant in Chattanooga in July 2008, months before the U.S. economy crashed and maintained their plan, despite the downturn. The plant will assemble the Passat mid-size sedan.
VW CEO Martin Winterkorn has said he plans to boost the company's U.S. sales to 1 million vehicles a year, including Audi and other brands, by 2018.
Automakers have announced more than $17 billion in factory investments for the U.S. and Canada since the beginning of 2010, including $2 billion by General Motors Co. this month, according to the Center for Automotive Research in Ann Arbor, Michigan.
Total sales in the U.S. of cars and light trucks may rise to 13 million this year, the average of 18 analysts' estimates compiled by Bloomberg. Light-vehicle sales last year climbed to 11.6 million from a 27-year low in 2009.
UAW union organizing
VW said the United Auto Workers union may try to organize the German automaker's U.S. workers. UAW President Bob King has said he expects to organize at least one non-union auto plant in the U.S. this year. He has said he's begun preliminary discussions with some of them and has declined to identify which companies may be targeted.
An organizing attempt may be made "at some point of time, probably," Frank Fischer, head of the factory, said in an interview. "This is up to our employees."
VW is a possible target for the UAW because it's new, said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts. The Chattanooga site is Volkswagen's first assembly plant in the U.S. since 1988. "All of the established plants the UAW has made efforts at and has been unsuccessful," Chaison said in an interview. "A new plant would be a very tempting target for the UAW."