Gestamp Automocion, a Spanish supplier to Volkswagen AG, said it plans to expand its stamping plant in Chattanooga to produce body panels for VW’s new midsize SUV.
The supplier, confirming reports that surfaced over the weekend, said today the $180 million project will triple its production capacity in Chattanooga. The company also will hire another 510 workers.
Gestamp and Volkswagen outlined their plans this morning in a joint press conference in Chattanooga.
Last year, VW said the plant -- which currently produces the Passat sedan -- would start assembling a new, as-yet unnamed seven-seat SUV late next year. That project will cost $900 million.
The Chattanooga plant, which currently employs 2,400 workers, will hire an additional 2,000 employees to build the SUV.
Volkswagen offered a hint of its plans for the new model in January at the Detroit auto show, where it unveiled the Cross Coupe GTE, a midsize SUV concept. The concept is built on Volkswagen’s MQB front-drive platform, which debuted in the U.S. last year when Volkswagen rolled out the redesigned Golf.
For Gestamp, the new project is another step in its drive to transform itself into a global supplier. Gestamp has 95 plants in 20 countries, with total sales last year of $7.57 billion.
Gestamp’s expanded plant in Chattanooga will produce body panels for Volkswagen’s new SUV, and it also will include a hot-stamping line. Hot-stamped components are favored by automakers that want to reduce the weight of bumpers, a- and b-pillars and other structural components.
Gestamp also will begin production in Chattanooga of chassis components, according to company CEO Francisco Riberas. “Chattanooga is now a key component in Gestamp’s strategic growth roadmap in North America,” Riberas said in a prepared statement.
With the Chattanooga expansion underway, Gestamp has positioned itself for further growth in the Americas.
In 2013, Gestamp formed a partnership with Mitsui & Co., a major Japanese industrial conglomerate, to do business in the Americas. Mitsui has a 30 percent equity stake in Gestamp’s operations in the U.S., Mexico, Brazil and Argentina.
