Gestamp was Volkswagen's first supplier at Enterprise South industrial park, and the Spanish company appears ready to undertake a major expansion that would create 500 more jobs.
The supplier, which already employs nearly 300 workers at a stamping facility on Hickory Valley Road near the VW factory, plans to open a new pressing plant to service the automaker's upcoming sport utility vehicle, according to multiple sources, including The Wall Street Journal.
The 500 jobs would be in addition to 200 more VW production positions for which the carmaker started hiring last week.
U.S. Sen. Bob Corker, Tennessee Gov. Bill Haslam, VW plant officials and others are slated to take part in a "major economic development" announcement Tuesday.
VW declined comment on the announcement.
Cory Jahn, Gestamp's operations manager in Chattanooga, referred questions on Saturday to the company's U.S. headquarters in Troy, Mich., which were closed.
Construction continues on the new Volkswagen Chattanooga expansion on Tuesday, May 26, 2015.The expansion would be Gestamp's third since its $90 million plant was built in 2010 to make stamped parts and welded assemblies for the Passat sedan.
Bill Kilbride, the Chattanooga Area Chamber of Commerce chief executive, said three weeks ago that the business group has been "on the receiving end of a lot inquiries" from suppliers.
The addition of a second vehicle assembly line at VW creates another business dimension for companies thinking about putting a plant in or near Chattanooga, he said.
"Suppliers intuitively want to be as close to the factory as they possibly can," Kilbride said. "That's just a rule of business."
A $900 million expansion is under way at the VW factory. The company has said it ultimately plans to add 2,000 more jobs to the 2,400 people already working at the plant.
Last month, a German company that handles and manages the auto parts used in Volkswagen's plant unveiled plans to hire 300 more workers by the end of next year.
Schnellecke Logistics USA, which already has about 350 workers here, is ramping up for the SUV that VW plans to produce in late 2016, said Jens Kappei, the company's chief executive in Chattanooga.
Gestamp opened its 225,000-square-foot Chattanooga facility in 2011, then bought 16.5 acres next to its plant and added 30,000 square feet for warehousing.
VW has started hiring for an engineering and planning center where it hopes to organize all those operations in North America. The center is seen as useful to suppliers to VW as well, officials have said.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.