published Wednesday, July 14th, 2010

VW says did all necessary in dispute

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    Staff Photo by Tim Barber/Chattanooga Times Free Press - LoJac crews position a temporary exit sign to the Volkswagen Drive exit along southbound Interstate 75, just past exit 11 in Ooltewah.

Amid complaints that some companies haven’t been paid by a builder on Volkswagen’s assembly plant, a VW official says the automaker has met its obligations but is helping find solutions to the problem.

VW is “working with the appropriate parties in an attempt to assist in finding workable solutions for all involved,” said Guenther Scherelis, VW’s general manager of communications in Chattanooga.

Last week, city attorney Mike McMahan said the Chattanooga Industrial Development Board and VW had received a number of complaints about companies that worked on the automaker’s assembly plant not getting paid on time.

That occurred after Southern Fabrication Contractors, which was supplying structural steel to the project, filed for Chapter 7 bankruptcy in May.

Mr. Scherelis said in a statement that 70 of the steel fabricator’s suppliers and subcontractors were affected by the filing and many have not been paid.

“Because this is a Volkswagen project, the bankruptcy has resulted in those same suppliers and subcontractors making claims against Volkswagen alleging nonpayment,” he said.

Mr. Scherelis said VW has met its obligations to the companies, and the automaker has no direct contractual obligation to Southern Fabrication nor subcontractors who are making the claims.

But VW is sensitive to the concerns of the companies, he said.

“Volkswagen strives to maintain a good working relationship with all of its business partners and the community,” Mr. Scherelis said, adding the company is trying to find a solution.

Mr. McMahan said that from the development board’s standpoint, it’s still relying on an agreement between the city and VW that the automaker is required to provide indemnification.

“The city is not planning on paying these liens,” he said.

VW’s plant is slated to start producing vehicles early next year and employ more than 2,000 workers when fully ramped up.

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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Tax_Payer said...

Already, VW is starting off on the bad foot with local companies and workers. I wonder how far they will go? Maybe, paying their factory workers as little as possible?

July 14, 2010 at 5:19 a.m.
alohaboy said...

This is where payment and performance bonds come into play.

July 14, 2010 at 9 a.m.
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