published Thursday, July 15th, 2010

Two years later, VW plant 90 percent done

  • photo
    Pictured is the Chattanooga Volkswagen plant.
    Photo by Jake Daniels

Two years to the day since Volkswagen unveiled plans for its only U.S plant in Chattanooga — and just months from production startup in early 2011 — VW officials say work on its $1 billion factory is on time.

Frank Fischer, chief executive of VW’s Chattanooga operation, said the 2 million-square-foot building is 90 percent complete, and more than 400 robots are installed to help make VW’s new midsize sedan.

“I’m really very pleased to report that everything is on track,” Mr. Fischer said.

But it has been a rocky couple of years for the American and world economies and even worse for the auto industry, which suffered its sharpest downturn in history after VW’s July 15, 2008, announcement.

Still, there’s the belief that the VW plant holds promise as the economic recovery ratchets up.

“It’s nice to launch a new product with an economic tailwind, rather than in the fall 2008 when there was a hurricane gale-force headwind,” said auto analyst Erich Merkle of autoconomy.com.

Hamilton County Mayor Claude Ramsey said that, despite the Great Recession, VW never let up after its announcement of the plant during a news conference in the Hunter Museum of American Art lobby, which was filled with Chattanoogans whooping it up at the news.

“I never saw any hesitation,” he said. “I’ve never seen them waver.”

TIMELINE

* July 15, 2008: VW announces Chattanooga as site for U.S. production plant.

* December 2008: VW names Walbridge to build paint shop shell.

* April 2009: Graycor picked to construct assembly and body shops.

* May 2009: Training center work starts.

* October 2009: Hiring process for production workers begins.

* December 2009: All major buildings made weather tight.

* February 2010: VW hires first production workers; adjacent supplier park to employ about 500 workers initially.

* June 2010: VW officially opens training center.

Chattanooga Mayor Ron Littlefield said the plant, Chattanooga’s biggest manufacturing investment in history, was “built absolutely at the right time” when auto markets were down and now are trending upward.

The plant’s construction and the 3,000 builders it has put to work also helped shore up the city’s economic foundation when it was needed, he said.

Adding to work force

Mr. Fischer said nearly 900 VW employees have been hired, part of the expected 2,000 or more the company is to bring on board when the plant fully is ramped up. He said the current employee number includes 231 production workers from Hamilton County.

Tom Edd Wilson, the Chattanooga Area Chamber of Commerce’s CEO, said there’s a lot of room for VW to grow its American market share, which is only about 3 percent.

“There’s a tremendous opportunity for VW over time to penetrate the market,” he said.

Volkswagen is trailing Toyota as the No. 1 automaker in sales worldwide and is aiming to reach the top spot by 2018. The U.S. market is seen by VW officials as a key to that goal.

Mr. Merkle said that, in addition to the midsize sedan VW will produce in Chattanooga, he foresees a crossover utility vehicle in the plant’s future.

“I think it will be similar to the Tiguan,” he said.

BY THE NUMBERS

* $686 million — Local and Tennessee contracts for plant

* 900 — Number of workers hired by VW so far

* 231 — Number of production workers

In addition, Mr. Merkle believes Audi production remains a possibility in Chattanooga as well, since Audi is owned by Volkswagen. Audi officials recently downplayed that idea in the short term.

Mr. Wilson said he’s confident VW will produce more cars than the 150,000 annually that it is targeting in Chattanooga.

“They’ll continue to add jobs,” he said.

Mr. Wilson said he also believes more auto suppliers will come to Chattanooga, saying the economic downturn made it hard for some to get credit and open plants in the area.

“It will just be a little longer period of time before it gets here,” he said. “As VW continues to build cars, bank credit will ease.”



“Our state has built a great track record for recruiting new businesses and creating jobs in Tennessee, but the announcement that VW had chosen to invest and call Tennessee home was a game changer.”

Gov. Phil Bredesen:



“I visited the Volkswagen site in February and was overwhelmed to see the dramatic changes that have taken place in the past two years.”

U.S. Sen. Bob Corker:



“Volkswagen’s decision to come to Tennessee has kept our state at the heart of the auto industry.”

U.S. Sen. Lamar Alexander



“The partnership with Volkswagen showcases Chattanooga’s position as a manufacturing giant in the Tennessee Valley Technology Corridor.”

U.S. Rep. Zach Wamp



“Volkswagen’s selection of Chattanooga has become a landmark announcement which substantially shifted the economic landscape of Tennessee.”

Matt Kisber, state economic and community development commissioner



Read more coverage of Volkswagen in Chattanooga.

about Mike Pare...

Mike Pare, the deputy Business editor at the Chattanooga Times Free Press, has worked at the paper for 27 years. In addition to editing, Mike also writes Business stories and covers Volkswagen, economic development and manufacturing in Chattanooga and the surrounding area. In the past he also has covered higher education. Mike, a native of Fort Lauderdale, Fla., received a bachelor’s degree in communications from Florida Atlantic University. he worked at the Rome News-Tribune before ...

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