Tennessee: State plans to pursue VW engine facility

NASHVILLE — While Volkswagen of America’s plans for a U.S.-based engine plant remain unclear, Tennessee’s chief economic recruiter says if the German auto giant does decide to build such a facility, the state intends to compete for it.

“At this time, we and everyone else are awaiting information on that project, and when that information comes forward we will pursue that,” Economic and Community Development Commissioner Matt Kisber said. “I can assure you we will do all we can to make sure — that makes sense — to make sure that that’s a Tennessee facility.”

Mr. Kisber’s comments came during a question-and-answer session at the state’s recent annual Economic and Community Development conference in Nashville.

Volkswagen’s July 15 announcement that it would locate its $1 billion auto assembly plant in Chattanooga was a major topic of discussion at the conference, along with ongoing state efforts to secure manufacturers who will supply VW. The plant itself is expected to generate 2,000 jobs.

Volkswagen spokeswoman Jill Bratina said the company “has made no decisions” about an engine plant.

“We’re really now just focused on getting the production facility up and running in Chattanooga,” she said.

Meanwhile, Ms. Bratina tried to bat down concerns raised by an Associated Press story on Thursday in which U.S. Sen. Lamar Alexander, R-Tenn., was quoted saying that, if the nation’s ongoing financial crisis isn’t resolved, the planned Chattanooga assembly plant could be jeopardized.

He said VW officials told him last week they were having problems obtaining the $300 million they borrow each month to make car loans.

Ms. Bratina said VW was not having any credit-money problems.

“Volkswagen Credit business is extremely strong, and we have access to the necessary funds,” she said. “The current crisis will have absolutely no impact on our plant in Chattanooga.”

Mark Drury, an assistant state commissioner for economic and community development, had no immediate comment Thursday on Sen. Alexander’s statements and said Mr. Kisber was out of the office.

The commissioner, along with Gov. Phil Bredesen and a number of other state and local officials, including Hamilton County Mayor Claude Ramsey, plan a trip to Germany in October to visit Volkswagen officials and VW supplier companies.

Chattanooga, Hamilton County and the state offered $577.4 million in incentives to win VW’s assembly plant. There was talk before the announcement of Chattanooga landing the facility that the company might put the assembly plant in one city and the engine plant in another.

Earlier this month, Automobilwoche, the same German publication that reported VW would locate the assembly plant in Huntsville, Ala., quoted Jochem Heizmann, the company’s group production director and a management board director, as saying, “Huntsville will always be an option for the VW Group for future projects in the U.S. And so, too, for a new component factory.”

But he also emphasized VW had made no decision about locating an additional plant in Huntsville.