Frank Fischer

Staff Photo by Matt Fields-Johnson
Construction continues at the new Volkswagen plant at the Enterprise South Industrial Park.

More than 500 workers are now building the Volkswagen assembly plant, on which nearly $436 million in contracts have been awarded to state and Chattanooga area firms so far, VW reported Wednesday.

“Our decision one year ago to invest in a U.S. production facility was a strategic step forward in our commitment to the North American market,” said Frank Fischer, chief executive of VW’s Chattanooga operations.

VW officials said the contract amount includes almost $198 million awarded by the city, state and VW to contractors and subcontractors for plant construction.

In addition, VW has so far awarded contracts totaling more than $238 million on an annual turnover basis with parts suppliers in Tennessee and the Chattanooga area for the new midsize sedan to be produced in the city starting in early 2011.

Also, another $230 million will be spent over the next 20 years for EPB to provide power to the Enterprise South industrial park plant site, according to VW.

A year ago, Volkswagen Group of America CEO Stefan Jacoby stood at Hunter Museum of American Art overlooking the city’s waterfront and announced plans to invest $1 billion in the plant and create more than 2,000 jobs.

Gov. Phil Bredesen said in a statement VW’s investment is already having a significant effect on the state.

He said the project is “an anchor from which additional investment will follow, and I feel as confident about it today as when it was first announced.”

The package to woo VW to Tennessee was an estimated $577 million in local, state and federal incentives.

Hiring decisions

Hiring for VW’s professional posts continues and will accelerate through 2009, company officials said. Volkswagen plans to accept applications for production slots in late 2009 with hiring to begin in early 2010.

“Our project in Chattanooga is made up of four pillars — the plant, the product, our suppliers and our people. We are committed to hiring locally, and we are convinced that we will have a best-in-class work force,” said Hans-Herbert Jagla, executive vice president for human resources locally for VW.

U.S. Sen. Bob Corker, R-Tenn., said construction of the plant and development of its supplier network are on track.

“All of us are anxious for the day when the first vehicles roll off the assembly line,” he said.

U.S. Sen. Lamar Alexander, R-Tenn., called Volkswagen and Chattanooga the “ideal marriage.”

U.S. Rep. Zach Wamp, R-Chattanooga, said the excitement Tennesseans felt a year ago at the announcement of the creation of thousands of high-paying, quality jobs has not worn off.

“Years of planning and hard work continue to pay major dividends for Tennesseans,” he said.

Hamilton County Mayor Claude Ramsey said that after years of site preparation and recruitment, it’s remarkable to see the progress VW has made in a year.

Mayor Ron Littlefield said the city “couldn’t have asked for a better economic development partner than Volkswagen.”

Matt Kisber, state Department of Economic and Community Development commissioner, said ECD is talking to firms interested in following VW’s investment and “I’m confident the ripple effect in our state’s economy is just beginning.”

Tom Edd Wilson, the Chattanooga Area Chamber of Commerce’s CEO, called VW “a world-class company on the rise, and it is also a perfect fit for our community culture and aspirations.”

Adam Green of the local group Hire Here said it’s encouraging VW and other local companies to continue to first consider local firms when Chattanooga has a business fitting the project.