The move is seen by observers as a new blow to Detroit's troubled economy. Volkswagen, on the other hand, wants to be closer to itrs traditional East Coast customers to help its money-losing U.S. operation, The Wall Street Journal said Thursday.

It also likely will mean several hundred jobs would move from Mchigan to Virginia.

In addition to announcing that it will invest roughly $100 million in a new facility in Herndon, Va., the company is said to be expected to outline plans to develop more models for the U.S. market.

Volkswagen, which employs 1,400 people in Detroit, said about 600-700 will remain in a call center to provide technical functions, the Financial Times said.