Chattanooga VW plant would boost local economy

Rick Wagner • Apr 29, 2008 at 12:00 AM

Sullivan County and the region stand to benefit from the potential location of a new Volkswagen plant in Chattanooga, according to local economic developer Richard Venable.

“We’re watching it very closely,” said Venable, chief executive officer of NETWORKS – Sullivan Partnership, a joint project of Sullivan County, Kingsport, Bristol, Tenn., and Bluff City. “There’s so much plastics in cars now, and we have a lot of that injection molding industry around here.”

In addition, Venable said existing automotive suppliers in Northeast Tennessee and Southwest Virginia might have a leg up on getting new business from VW if it put a plant in the Southeast. The greater Tri-Cities has ready interstate and rail access, especially to Chattanooga.

The Associated Press and The Tennessean are reporting that automotive analysts and experts expect Volkswagen to consider sites in Chattanooga, the Clarksville area and northern Alabama for a possible new U.S. assembly plant.

The three sites have been certified as automotive manufacturing megasites by the Tennessee Valley Authority’s site selection consulting firm, McCallum Sweeney of Greenville, S.C.

Commerce Park, northeast of Clarksville; Enterprise South, the site of the former Volunteer Army Ammunition Plant in Chattanooga; and the Limestone County Megasite, off Interstate 65 southeast of Athens, Ala., are all viable candidates for the plant, according to site selection experts.

The Chattanooga site was in the top tier of sites Toyota Motor Manufacturing Inc. considered last year. However, another TVA megasite near Tupelo, Miss., was chosen instead. The newest U.S. manufacturing site for Toyota is under construction and scheduled to open in 2010.

Local officials connected with all three of the sites have refused to say whether they are in talks with Volkswagen and declined to talk about the properties in general, The Tennessean reported.

“When they take the lockdown approach in talking with you, you know something is going on,” Erich Merkle, an automotive manufacturing consultant with IRN Inc., in Grand Rapids, Mich., said in an Associated Press article. “If they’re not talking to the media, they’re talking to Volkswagen.”

The German automaker announced last week it’s looking at Alabama, Michigan or Tennessee as possible locations to build the plant and will make a decision this summer.

Tennessee and Alabama should be favored over Michigan to land the plant, analysts say, based on the auto industry’s ongoing migration into the Sun Belt and concerns about labor’s heavy influence in Michigan.

Tennessee is the home of Nissan Motor Co.’s North American headquarters near Nashville and has plants in Smyrna and Decherd. The state also has a General Motors Corp. assembly plant in Spring Hill.

Experts said Chattanooga may be the best of the three TVA sites for Volkswagen’s needs in terms of infrastructure and highway and railway access.

“I’m personally pulling for the site in Chattanooga, but northern Alabama is not that much farther,” Venable said, adding that the Clarksville plant also could have spin-off for Sullivan County and the Tri-Cities.

Jim Frierson, director of the Advanced Transportation Technology Institute at the University of Tennessee – Chattanooga, said the city also has an “environmental consciousness” that would be attractive to Volkswagen.

“Volkswagen is coming out of Germany, which is the greenest of European Union countries,” he said.

Chattanooga has transformed itself from having “awful environmental conditions in the 1960s” because of pollution from manufacturing plants to being one of the cleanest cities today, he said.

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