- Associated Press - Wednesday, May 27, 2015

CHATTANOOGA, Tenn. (AP) - A new study projects Volkswagen’s expansion in Chattanooga could lead to the creation of nearly 10,000 jobs.

The report conducted by the University of Tennessee’s Center for Business and Economic Research was released Wednesday and estimates the factory could add $370 million in new annual income once the expanded production is underway.

The report was commissioned by Volkswagen, which is spending $704 million to grow the plant to make a new sports utility vehicle and to open its new North American Engineering and Planning Center.

The projected 9,800 new jobs include 1,800 positions at the plant and 200 jobs at the engineering center.

“Extensive supplier linkages and good incomes earned by Volkswagen employees account for the significant employment gains and economic multiplier effects in Tennessee,” said Bill Fox, the director of the UT center and author of the report.

The plant expansion is scheduled to be completed by the summer of 2016.

“The study underscores Volkswagen’s commitment to Tennessee, and we are excited to grow our team and the Chattanooga plant as we gear up for the production of our first-ever seven-passenger SUV for the U.S. market,” Christian Koch, the president and CEO of Volkswagen Chattanooga, said in a release.

The Chattanooga facility is Volkswagen’s lone U.S. assembly plant.

Republican Gov. Bill Haslam last week signed into law the state’s $33.8 billion spending plan that included about $166 million in state incentives for the VW plant expansion.

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