Chattanooga: VW says local minority companies to get first consideration as suppliers

A Volkswagen official told hundreds of minority business people seeking to become suppliers for the automaker Thursday that it will focus on Chattanooga area companies first.

“We need to forge relationships,” said Thomas Loafman, Volkswagen Group of America’s director of purchasing, at a standing-room-only information session.

He said the company plans to aim its minority- and women-owned business procurement effort next at Tennessee companies and then at regional and national firms thirdly.

“For us, it’s becoming ingrained in the community,” Mr. Loafman said.

He said VW is planning five more vendor fairs in the next few months as it ramps up operations.

VW spokeswoman Jill Bratina said VW will begin awarding Tier 1 contracts in the near future. A Tier 1 supplier makes products specifically for the automaker.

VW hasn’t had a production facility in the United States in more than 20 years, and Mr. Loafman said it’s approaching its venture here as if it were a start-up company.

“Up to two months ago, we didn’t make anything in this country,” he said. “We were just a seller.”

Mr. Loafman told the group, one of three sessions it held at the Convention Center, VW wants 10 percent of its plant construction to be placed with minority suppliers when production starts at the Chattanooga facility by early 2011.

Also, the company aiming by 2011 for 5 percent of components to come from minority outfits, he said.

“By 2015, that will be up to 10 percent,” Mr. Loafman said at the procurement fair organized by the Tennessee Multicultural Chamber of Commerce.

Mike Stewart, of Chattanooga, manager of Advantage Windows, said he has an injection molding plant in storage waiting for an opportunity such as VW.

If political leaders want to get the economy rolling again, “they need to do a stimulus for small business,” he said

Dave Jernigan, whose wife owns American Diversified Distributors, a local industrial safety products company, said the operation is a mere 10 miles from the plant and hopes to win a contract.

“We used to do business with U.S. Pipe,” he said, which in 2006 ceased production after a century of operation.

The VW plant will produce a new mid-size sedan for the American market that will be designed and developed in Germany, Mr. Loafman said.

But, he said the supply base in the Chattanooga area is “more than capable” to meet the company’s needs.