In a vote of confidence for its planned Chattanooga plant amid a staggering national economy, Volkswagen motored ahead Tuesday with a $230 million, 20-year agreement to buy power from EPB.
VW’s top official in the city said it’s targeting late March or early April for making decisions on construction contracts for the next two big buildings at the site — a body shop and assembly facility.
In addition, Frank Fischer, the plant project’s chief executive, said the automaker is now eyeing a May 14 date for a ceremonial groundbreaking for the $1 billion factory going up at Enterprise South industrial park.
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VW officials said Tuesday that plans are for the paint shop to be weather tight in September.
Chattanooga economic development officials lauded the steps taken by the company even as auto sales in 2009 are projected to have their worst year in decades.
“We’re very pleased with the progress,” said Trevor Hamilton, the Chattanooga Area Chamber of Commerce’s vice president for economic development.
Mr. Fischer, touching on the issue of hiring area contractors to help build the plant, said VW plans for at least 30 percent local participation.
He said general contractors bidding for VW’s business will organize outreach meetings for subcontractors.
Meanwhile, Mr. Fischer said he has a team working on wooing parts suppliers for the car to be built at the plant. Supplier companies along with the auto manufacturers are under pressure from the down economy.
Mr. Fischer said some parts of the new vehicle to be made in Chattanooga, such as wheels, seats, and axles, will need to be close to the factory.
“We’re talking to investors to move ahead,” he said. Mr. Fischer said he ultimately hopes 20 supplier companies will be near the plant that’s slated to open in the first half of 2011.
Included in the power pact with EPB, VW purchasing director Thomas Loafman said another $11 million will be invested at the site for infrastructure, including $4.2 million for a new substation and money for future growth.
“EPB has been a key partner,” he said.
Joe Ferguson, EPB’s chairman, said the utility plans to move quickly.
“We look forward to working together with Volkswagen as their power supplier in order to help make their new operation a huge success for many years to come.”
Concerning the construction of the $30 million paint shop, which is in progress, Mr. Fischer said that project is “very much on track and it may be done in shorter time.”
He said 49 percent of the contracts awarde
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VW will break ground in MayVolkswagen announced a $230 million agreement for EPB to supply power to the automaker’s Enterprise South production facility. Additionally, VW officials revealed that a groundbreaking ceremony is scheduled for May 14.
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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