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VW Supplier Gestamp Expands in Tennessee

June 25, 2015
Gestamp, which manufactures metal components, will invest $180 million in the project that triples its capacity in Chattanooga.

The partnership between Volkswagen Group of America (IW 100/7), Chattanooga Operations, LLC and Gestamp, a company that designs, develops and manufactures metal components and assemblies for the automotive sector, advanced further on June 23 with a commitment to add 500 additional jobs in Chattanooga.

This project will include an expansion of Gestamp’s existing Chattanooga facility and the construction of a new stamping facility in Enterprise South to accommodate stamping of Class A parts including external metals skin for the new mid-size SUV.

Gestamp will invest $180 million in the project that triples its capacity in Chattanooga.

 “The importance of this expanded partnership for Volkswagen and Chattanooga cannot be overstated,” said Christian Koch, CEO of Volkswagen Chattanooga. “We have put another crucial pillar into place for our future success and the benefits of this expansion will impact the community for years to come,” Koch said.

The announcement was made at the Chattanooga production facility that will build its 500,000th Passat next month.

Currently Volkswagen uses press shops in several states to provide all the stamped metal parts for the Passat built in its Chattanooga facility. This new expanded partnership will allow all of the external sheet metal stamping and a majority of the structural parts to occur at or near Enterprise South, greatly reducing the cost of transportation.

Gestamp Chattanooga will offer for the first time hot stamping technology, in which Gestamp is a global leader. This state-of-the-art process allows the metal to become lighter, but harder, contributing to the reduction of greenhouse gas emissions while improving the occupant’s safety inside the car. Chattanooga’s new hot stamping line will become the 13th of its kind in Gestamp’s U.S. footprint.

“Gestamp was an early believer in Chattanooga in 2009 and now we are taking a remarkable step forward with a macro-project that multiplies our size, adds Class A, introduces hot stamping technology and brings chassis for the first time into our North American operation,” said Francisco J. Riberas, CEO of Gestamp.

“Chattanooga is now a key component in Gestamp’s strategic growth roadmap in North America,” Riberas said. “It began with Volkswagen, with whom we share a strong and enduring bond globally, and has grown to include both government and civic organizations in Tennessee, which engaged with us at the highest levels to make this project possible. We believe this will prove to be a winning combination.”

Volkswagen has agreed to give up 59 acres under its control in a land swap with the City of Chattanooga and Hamilton County governments to provide space adjacent to the factory for the new Gestamp facility. The City and County will provide Volkswagen with land of similar value.

“The automotive sector touches nearly every corner of the state with 88 of Tennessee’s 95 counties having automotive operations,” TNECD Commissioner Randy Boyd said. “When Gestamp located in Chattanooga in 2009, it was the company’s first greenfield project in the United States, and it’s great to see that another facility will soon be built in Hamilton County to aid in the company’s growth. I thank Gestamp for creating these new jobs in East Tennessee and look forward to our continued partnership.”

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