published Wednesday, July 7th, 2010

VW, city get complaints of nonpayment

Audio clip

Mike McMahan

Volkswagen and a city panel have received a number of complaints about companies working on the automaker's assembly plant not getting paid on time after two contractors filed for bankruptcy.

"We've received a number of liens of subcontractors and suppliers not getting paid," said Mike McMahan, the Chattanooga Industrial Development Board's attorney, on Tuesday.

Siskin Steel & Supply Co. Inc. has sued Volkswagen's Chattanooga operations and the board, saying it is owed more than $660,000 for materials it supplied the plant under construction.

Siskin attorney John Konvalinka said in the Hamilton County Chancery Court suit that the VW plant site is owned by the development board and leased to the car maker for 30 years.

Earlier, Southern Fabrication Contractors, a Chattanooga company supplying structural steel for the VW project, filed for Chapter 7 bankruptcy. Court documents show Southern Fabrication owes Siskin $710,000.

Mr. McMahan told the development board VW has hired a Chattanooga law firm to address the nonpayment problems.

"They are being addressed, obviously not as quickly to suppliers and people as they'd like to have," the attorney said.

He said that under a memorandum of understanding between VW and the city concerning the plant project, the automaker is required "to indemnify in respect to this."

Mr. McMahan said he is "confident in the long run all these will be resolved."

A VW spokesman didn't have any immediate comment Tuesday.

Volkswagen is building a $1 billion auto plant that is to produce a midsize sedan new to the American market. The plant is expected to start production early next year.

Continue reading by following these links to related stories:

Article: VW replaces US chief Stefan Jacoby as contract talks continue

Article: Jacoby keynotes innovation event

Video: Jacoby shares plans for Volkswagen

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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lonerstoner said...

VW does many things there way ,regardless that they arent in Germany. from there paying Depts, paying american empoloyes, the way there hireing processes are, OSHA standerds they dont obay!! Most Germans are here without a working Visa . List goes on and on and on .....

July 7, 2010 at 6:55 a.m.
greenerob said...

How much credience do we give to a guy who's user name is "lonerstoner?"

Sounds to me like he just didn't get hired. Based on the name, I would argue it may be a drug test issue. Just a hunch.

July 7, 2010 at 10:38 a.m.
deltenney said...

It looks like careless bookkeeping on the part of VW and the Board, to me. To force suppliers into bankruptcy because of slow payment is not a good way to operate a business. It is the day-to-day conduct that establishes trust and VW is not getting off on the right foot here by delaying payment to subcontractors and suppliers. This is not a good indication of corporate and legal responsibility.

July 7, 2010 at 11:51 a.m.
BrainerdRebel said...

Stoner probably got laid off from Siskin. I know several small companies that VW has not paid. Most people like greenerob have never ran a business and don't understand payables. The truth is VW doesn't have the money. When public financial support is force on the taxpayers by government it is called fascism. By the time VW starts production several of these companies will be out of business and the VW job creation will be nullified. The taxpayers will be stuck with the bills when VW closes the plant, after the tax exemptions are up, they have done it before.

July 8, 2010 at 1:48 p.m.
lonerstoner said...

RE: greenrob Morons need noy be herd from , white color worker, you probabley never done anything constructive befor in your life , you cant fix STUPID please dont re-produce

July 8, 2010 at 7:12 p.m.
greenerob said...

RE: lonerstoner

Please try and look into some sort of spell check software on your compueter. Out 28 words in your last post you misspelled or misused 10 plus the 6 or 7 in the first post.

Smoke another one.

July 12, 2010 at 1:24 p.m.
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