Kevin Krause

Change is coming to Chattanooga in a big way due to Volkswagen and the city will see a lot of new faces, both from Germany as business gears up and the Midwest as the U.S. auto industry unravels, an auto expert says.

“There will be 3,000 to 4,000 Germans impacting your city,” said Kevin Krause, president of the Atlanta-based executive recruiting firm BaxterKrause.

Mr. Krause told the Downtown Council of the Chattanooga Area Chamber of Commerce the Volkswagen auto assembly plant will eventually equal or surpass the impact of BMW’s facility in South Carolina.

A University of South Carolina study last year showed BMW’s plant supports 23,050 jobs and $1.2 billion in wages and salary annually.

Mr. Krause said he is having a meeting soon in Atlanta of 28 VW suppliers which “are coming into the city.”

“It’s happening right now,” he said of the changes.

Mr. Krause said another company, Faurecia, has indicated it could need 300 people at a facility in the Chattanooga area to supply the VW plant that’s slated to start production in early 2011.

He said that up to 80 percent of the cost of a car is material, and usually a third is supplied by companies which need to be close to the plant. Mr. Krause said seats, front end systems, bumpers, windows, engine components, emissions equipment and chassis are some of the items.

He said that seven or eight logistics companies will land in the area.

“You’ll turn into a logistics hub,” Mr. Krause said. “You think there’s a lot of traffic on I-75 now.”

Mr. Krause said VW will need “high-end skilled labor” and the German automaker will want to see local colleges and education institutions “kick it up a notch.”

Having lived and worked in Germany for 14 years, he said Germans have a quality mind-set, he said. They also are detail-oriented, cautious about making decisions and direct, Mr. Krause said.

They also will want specialty grocery stores and European-quality bakeries, said Mr. Krause, whose company has done searches for BMW, Mercedes, Bosch, Siemens and Toyota.

Jim Kennedy, president of Kennedy, Coulter, Rushing & Watson, said Chattanooga needs to be prepared for a culture shift, and it must understand how Germans do business.

Chris Crimmins, Chattanooga Land Co. vice president, said one of the keys to maximizing VW’s potential will be work force training.

“We’re very tuned into that,” he said about the city’s leadership.