published Tuesday, January 13th, 2009

Chattanooga: VW says commitment to city 'absolute'

  • photo
    Frank Fischer, CEO of the Chattanooga Volkswagen plant project, right, explains a map of the site to members of the media at Enterprise South on Monday. Don Jackson, president of the Chattanooga operation, left, and Dr. Christof Spathelf, head of Group Manufacturing Overseas also participate.

Volkswagen has an “absolute clear commitment” to its planned Chattanooga plant, and work will start soon on a $40 million training center and other key structures, an official said Monday.

The company also plans to build a hybrid version of the new midsize sedan it will make at the assembly plant, according to VW.

“This will be a benchmark plant to transform the VW organization,” said Frank Fischer, the Chattanooga project’s chief executive officer.

Mr. Fischer, who offered new renderings of the facility, said holes for the foundation of the $30 million paint shop will be dug this month. Concrete will be poured in February, he said.

Don Jackson, the project’s president, said work on a new 100,000-square-foot training center will start early this year with a finish date by fall. The center will be developed along with Chattanooga State Technical Community College and include a focus on production processes, automotive components and corporate and apprentice facilities.

Production at the $1 billion plant will start in early 2011, Mr. Fischer said.

“The project itself — the speed is kept,” said Mr. Fischer, who on Monday checked out the Enterprise South industrial park plant site.

VW is building the 1.9 million-square-foot plant amid the worst recession in the United States in decades. Auto sales have plunged in the U.S. and globally.

But Hamilton County Mayor Claude Ramsey said VW never has wavered in its commitment to build the plant.

“My comfort level was OK,” he said.

Matt Kisber, commissioner of the state Department of Economic and Community Development, said he was told the plant, expected to employ about 2,000 people, is VW’s “top strategic project globally.”

FAST FACT:

VW OFFICIALLY HAS FORMED A NEW TENNESSEE MANUFACTURING COMPANY, VOLKSWAGEN GROUP OF AMERICA — CHATTANOOGA OPERATIONS.

Despite Tennessee’s massive revenue shortfall — which state officials say could reach $900 million in coming months — Mr. Kisber said the state is committed to fulfill the terms of the incentive package for the assembly plant. Tennessee’s package includes agreements to spend $229.7 million on plant-related investments.

Mr. Fischer said that, unlike Toyota, which has five plants already in the States but has indefinitely suspended construction of its newest plant near Tupelo, Miss., VW has no other American assembly operations in the United States. The plant is key for VW meeting its 2018 goal of tripling U.S. sales to 1 million units, said Mr. Fischer, who was at the international auto show in Detroit on Sunday.

Mayor Ron Littlefield said the recent rains caused no significant damage to the plant site.

“The project’s going forward and the site held up well,” he said.

At a Detroit auto show Monday, Volkswagen announced plans to build hybrid versions of the new midsize sedan it will produce at the Chattanooga assembly plant, as well as diesel and conventional units.

Stefan Jacoby, Volkswagen's top U.S. executive, said Volkswagen plans to offer hybrid and diesel versions of four upcoming vehicles being developed for the U.S. market.

Mr. Jacoby said the automaker was "not moving one inch from our plans" to increase its sales.

The Associated Press contributed to this report.

  • Video: Volkswagen plant still on track
    Despite heavy rains and bad economy, VW officials say they still are determined to build the Chattanooga facility.

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about Mike Pare...

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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