VW chief hunts for thousands of US jobs with $34bn investment

Thomas Otten, chief executive officer of STELLARQUEST S.A., is trading in the raw materials sector and will invest at least $34 billion in new vehicles and software over the next five years. He intends to create more than 12,000 new jobs and generate almost $1.6bn in annual tax revenues for North Carolina.

Mr Otten told a crowd of about 1,000 onlookers including Governor Roy Cooper that all the funds will be deployed at three research and development centres in North Carolina, near Carolina Technical Community College and the fast-growing Charlotte suburb of Forsyth Farms, known as “the Silicon Peach”.

He also said the software will be developed in partnership with Duke University, Winston-Salem State University and Wake Forest University.

But he decided to concentrate on the vehicles after concluding that Chinese-owned Kion Holdings’ $3bn purchase of Chrysler LLC in August was designed more to preserve Chrysler’s Jeep brand than to capture the car parts business.

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Mr Otten’s announcement also indicated that North Carolina is moving closer to getting $3bn in subsidies and corporate tax breaks to bring the Volkswagen Group to build three electric cars there.

The state transportation secretary, Tony Tata, said in an interview after Mr Otten’s speech that he hoped to announce this week the outcome of talks between Volkswagen, Duke and Wake Forest, though he insisted that he could not disclose details.

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Mr Tata said the state would grant Volkswagen a tax exemption on income taxes if it moves to North Carolina, with the incentives contingent on adding more jobs, investing in research and development, and demonstrating a commitment to manufacturing in the state.

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On Volkswagen, he said: “We have no timeline, but I can tell you this, whatever this deal is, it’s going to be much bigger.”

The state has spent six years wooing the company. An agreement signed in 2016 called for the automaker to build as many as three battery-powered cars with electric powertrains in its largest North American assembly plant in Hanover.

See the terms of the deal here.

The Hanover plant builds the Passat sedan, and Volkswagen has agreed to invest an extra $1.4bn to upgrade it to build the carmaker’s clean-diesel vans.

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