More VW Coverage

Staff Photo by John Rawlston Dr. Jochem Heizmann, Volkswagen Group of America board member, speaks to those gathered on Thursday for a "wall raising" ceremony at the Volkswagen plant under construction at the Enterprise South industrial park. Seated on the stage with him are, from left, Tennessee Governor Phil Bredesen, German Ambassador the the U. S. Klaus Scharioth, CEO and Chairman of Chattanooga Operations Frank Fischer, and Stefan Jacoby, CEO of Volkswagen Group of America.

In 1989, a wall in Berlin came down, allowing people from two sides of the same city to come together.

On Thursday, a German company built a wall in Chattanooga, allowing people from two sides of the Atlantic Ocean to work together.

“Twenty years ago, a wall came down in my country,” said Klaus Scharioth, Germany’s ambassador to the United States, standing in the sun at Chattanooga’s Enterprise South industrial park. “Today, I helped put a wall up.”

The first wall of the new Volkswagen plant was hoisted by crane Thursday, a ceremony that shows the carmaker is revving ahead with the $1 billion auto assembly plant, top VW officials said.

Stefan Jacoby, VW Group of America’s chief executive, said that despite the recession, the company is “not taking its foot off the accelerator pedal in the U.S.”

In addition to the Chattanooga plant, which is expected to produce 150,000 vehicles a year when it starts production in early 2011, Mr. Jacoby said VW is ramping up its national dealership network. Dealers are investing millions of dollars to upgrade and improve quality, he said.

“We’re not there yet but working hard,” Mr. Jacoby said.

Tennessee Gov. Phil Bredesen told about 400 people who turned out for the ceremony that VW’s decision “puts a bright spotlight” on Chattanooga.

“The lessons learned here will build economic prosperity across Tennessee,” he said.

An estimated 2,000 jobs will be created at the factory along with thousands of other spin-off posts at supplier companies.

“Volkswagen will be a real jobs engine for the entire region,” said Jochem Heizmann, a VW board member in charge of worldwide group production.

Porsche card

VW officials were tightlipped about intense negotiations in Germany to merge VW and automaker Porsche. But Mr. Heizmann said the union would bring 10 car brands under one roof.

“It will have everything it takes to be a champion of the auto industry,” he said of the merged company.

VW CEO Martin Winterkorn, who was scheduled to be in Chattanooga, canceled his visit to attend meetings on the merger.

VW officials said they were open to possible future expansions at the Chattanooga plant, but they wouldn’t commit to what kind of vehicles might be produced.

Frank Fischer, who heads VW’s Chattanooga operations, said there will be pent-up demand when the company begins making a new midsize sedan to compete with Toyota Camrys and Honda Accords.

“There’s no better time to do (the plant),” he said. “If we do it after the recovery, it’s just late.”

Hamilton County Commissioner Richard Casavant, dean of the University of Tennessee at Chattanooga’s college of business, said he expects the auto market will have gotten much better by the time VW opens its plant.

“The car gods are smiling on Chattanooga,” he quipped.

Marlena Russell, senior VW recruiter who joined the company in February, received a visit Thursday morning at her East Brainerd home from top VW officials welcoming her to the automaker’s family.

“I’m looking, and VW is looking, to hire local people,” she said.

HISTORICAL VIEW

Jackie Hildebrandt, who lives off Hunter Road just east of the plant, hopes her home value improves because of VW.

“My kids are going to need some help in college, and that might be the way I pay for it,” she said.

Chattanooga State Technical Community College is poised to educate an entire crop of workers for the plant. Larry Bramlett has been an electronics repairman for years, but the 56-year-old enrolled in the school’s electronics program in August 2008 because his small business faltered under competition.

“Volkswagen is just going to be a big boon for the whole area, but when I heard the plant was coming I thought, ‘Man, that will be a great place to work,’” he said.

Chattanooga Mayor Ron Littlefield said landing an auto plant is “the holy grail of economic development.” County Mayor Claude Ramsey said that “our future is a little brighter than a lot of places. I’m thankful for that.”

Still, some believe Tennessee offered too many incentives to land VW, including government assistance and tax breaks valued at $577.4 million in current dollars.

“I don’t like it,” said Tim Price, who owns a chemical company in Chattanooga. “They’ll be no pay-off here for most people in this county. Now people like me are subsidizing a foreign business.”

Gov. Bredesen said that, from an investment point of view, “this was about as close to a no-brainer as you can get.”

“The direct impact of the construction, the sales-tax money, the jobs created here is tremendous,” he said. “I think the taxpayers got a very good deal on this one.”