Volkswagen AG said Friday it will buy land, machinery and equipment from bankrupt German supplier Karmann GmbH.
During the coming weeks, the company plans to establish a new Volkswagen car manufacturing subsidiary and later, start a new vehicle project at the Osnabrueck site, Europe's largest automaker by sales said in a statement.
The car maker expects to create over 1,000 jobs by 2014 and will begin vehicle production in Osnabrueck in 2011.
Karmann filed for bankruptcy protection April 8 as demand for cars deteriorated, reflecting the woes embroiling the auto industry amid the economic downturn.
IG Metall representative Hartmut Meine said "negotiations were very tough, but in the end we reached a partial success." Osnabrueck will remain an automobile production location thanks to Volkswagen's efforts and will offer job opportunities for people in the region, Meine added.
Karmann is headquartered in Osnabrueck in the German state of Lower Saxony, around 160 kilometers west of Volkswagen's main plant and headquarters in Wolfsburg.
Lower Saxony is Volkswagen's second-largest shareholder with a voting stake of 20.1%.
Karmann is mainly known for its expertise in cabrios and has produced cars as a contractual manufacturer for many global automakers.
Among the numerous cars it manufactured during its corporate history spanning more than 100 years were the Volkswagen Beetle and Golf cabrios, the Chrysler Crossfire coupe and roadster and the Mercedes-Benz CLK cabrio.
