TRAVERSE CITY, MI – As its new assembly plant in Chattanooga, TN, gears up for a VW-brand midsize sedan next year, Volkswagen AG continues to weigh whether to add an Audi model at the facility.

“We’re studying that,” says Thomas Loafman, purchasing director-Volkswagen Group of America, stressing no decision has been made.

Loafman also confirms VW intends to decide by year’s end on plans to produce engines in North America. Engines for the new midsize sedan VW will build in Chattanooga initially will be imported from Germany.

Loafman was interviewed by Ward’s after a Tuesday address at the CAR Management Briefing Seminars.

VW’s white-collar workforce at the new plant already is in place, and the auto maker has begun hiring and training line workers.

“We hired 200 a month ago and plan to have 2,000 workers,” nearly all residing in the Chattanooga area, Loafman says. The plant’s annual capacity is targeted at 150,000 units.

Loafman, who spent 19 years on the former General Motors Corp.’s purchasing staff, joined VW in 2006. Chattanooga is a key part of VW’s goal of selling 1 million VW and Audi models in the U.S. by 2018.

“There’s a heavy emphasis on making the plant as ‘green’ as possible,” he says. “There’s a greater cost up front, but in the end it becomes more cost-effective over time.”

VW will have six key suppliers located on its site to supply seats, chassis modules, front and rear fascias and other modules, Loafman says. “These are the most critical from a logistics standpoint,” he adds.

During a question-and-answer session following his address, Loafman says he’s had no problems with supplier payments because production hasn’t started.

However, he says VW in the past has had to “intervene” in numerous instances to assure payments cascading down from Tier 1 to Tier 2 and hence to Tier 3 suppliers are made in a timely manner.