published Wednesday, June 3rd, 2009

VW pledge commitments reach half

Audio clip

Bill Payne

About half of the more than $235 million in spending pledged by the state, Chattanooga and Hamilton County for construction of the Volkswagen plant is committed so far, officials said Tuesday.

City Chief Financial Officer Daisy Madison said 51.7 percent of the commitments overseen by the Industrial Development Board for the building of the plant are either spent or encumbered.

The major areas of spending include site preparation, infrastructure, and a training facility along with the visitors and welcome centers.

Ms. Madison said all the items are under budget to date.

City Engineer Bill Payne told the board there is a risk that some spending may go over budget, but it’s too early to tell.

“With any construction project, there’s always that risk,” he said.

He said there are negotiations with VW and the state over potential adjustments to future projects related to the plant.

The spending is part of the $577.4 million in city, county and state incentives to attract VW. State and local tax credits along with infrastructure, site and work force training costs were all part of the package.

The $1 billion VW plant is slated to start production in early 2011, creating about 2,000 jobs. A new midsize sedan aimed at American motorists is to be produced.

The plant’s paint, assembly, and body shops are under construction. Work also has begun on a temporary visitors center and a training center.

In other business, the board approved a couple of contracts:

Thomas Brothers Inc. of Chattanooga won a $2.1 million contract for site work related to installing sewer and drainage lines around the plant’s paint shop.

White Electrical of Atlanta received a $1.8 million contract to provide electrical switch gear connecting the paint shop to a substation.

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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Mikey_b said...

Did I do my math wrong or is that $288,700 in incentives per job?

June 3, 2009 at 8:29 a.m.
champ1 said...

That's what an investment's all about Mikey_b...It'll more than pay for itself in the future.

June 3, 2009 at 10:21 a.m.
Humphrey said...

The same people who gave all this money to VW (that is partially owned by the German government) raised a fuss about loaning any money to GM, and so they lost as many jobs at spring hill as they hope to gain here, except here the profits will go back to Germany, like we are Germany's Mexico. It seems weird to be investing in Germany and not USA.

June 3, 2009 at 11:56 a.m.
Mikey_b said...

Champ1, How? Got any figures?

June 3, 2009 at 12:44 p.m.
Mikey_b said...

TN gets 2,000 $12/hr jobs.

With $12/hr jobs, how long will it take the taxpayers to get repaid for our 'investment'?

June 3, 2009 at 1:15 p.m.
chatt31 said...

i am a little concerned over VW still building in this god aweful recession--

How long will VW last here?- How long will it be before they too start laying off employees.

I don't see any sense in getting excited of VW and all the jobs it is creating-- look at what the state is loosing with GM-- it doesn't balance at all. the plant in Spring City and all the dealerships to close.

June 3, 2009 at 2:50 p.m.
thatguy said...

I bet a lot of local investors would build plants for all types of business if the city, county, and state put in half the money. Instead Corker and the clan brag about how they lured VW to Chattanooga. Wonder how much of that money goes back into the pockets of politics?

June 3, 2009 at 3:34 p.m.
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