published Thursday, June 7th, 2012

Tantalizing VW prospect in Chattanooga


New Passats await shipment at Chattanooga’s Volkswagen plant.
New Passats await shipment at Chattanooga’s Volkswagen plant.
Photo by Dan Henry /Chattanooga Times Free Press.

It is no closely held secret that Volkswagen long has planned a major expansion of operations at Enterprise South Industrial Park, but just what that expansion might look like has been less clear.

Some hints are surfacing, however, and at a good time for the Chattanooga area.

Even as the local Pilgrim's Pride poultry-processing plants are laying off 190 employees, Jonathan Browning, CEO of Volkswagen of America, has told the Detroit Free Press that Chattanooga may be an ideal location to build a midsize utility vehicle. That would be in addition to the award-winning Passats already being built in Chattanooga by thousands of workers.

Something between the compact Tiguan and the bigger Touareg may be on tap for VW in Chattanooga, Browning said, adding that "It's under discussion."

When all the possibilities for expansion are tallied up, local VW facilities could be turning out as many as half a million cars each year.

Of course, expanded facilities don't just materialize. They would be built by local workers, adding to the employment benefit for our area. And there would be spinoff benefits, too, as suppliers for VW ramp up production.

While there is still some uncertainty about VW's specific intent, it is hardly mere speculation.

Chattanooga's Industrial Development Board is getting more than $19 million from the state, part of which will provide for the regrading of land beside the existing VW plant. The board has taken other steps as well, including hiring a company that will map out a new road to the nearby supplier park and the layout of future buildings.

VW officials "want to get the layout done," a city Public Works Department official told the Times Free Press.

That scarcely seems like something VW would pursue if its expansion plans were not reasonably solid.

Tom Edd Wilson, head of the Chattanooga Area Chamber of Commerce, is equally confident about the German company's goals.

"We've never doubted VW's continued interest in taking advantage of all the property," he said. "Here, they've got to get the site ready for whatever they may end up finalizing."

Volkswagen announced this year that it would boost local employment to roughly 3,500 workers.

That announcement, plus the apparently clearer plans for expansion, comes at a crucial time for the city.

Even before the announced layoffs and relocations at Pilgrim's Pride, the unemployment rate in the Chattanooga area was not especially low. While that 7.1 percent rate is significantly lower than the U.S. jobless rate, the reduction in the local rate over the past year has been mainly due to people dropping out of the job search, not to a big jump in overall employment.

It goes without saying that the expected VW expansion and any other local job creation are welcome news.

Let's hope we get even more of it.

1
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I sense an understatement at the state subsidy of the industrial development.

Huh.

June 7, 2012 at 12:14 a.m.
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