The first Volkswagen supplier to land at Enterprise South industrial park already is expanding its footprint.
Gestamp Corp. plans to buy 16.5 acres adjacent to its $90 million Chattanooga plant, which started operations last year producing stamped parts and welded assemblies for the nearby VW factory, an official said.
Gestamp plant director Nick Proctor said the company will add 30,000 square feet to its 225,000-square-foot facility for warehousing.
"We'll tie it into the existing building," he said about the expansion that will cost up to $3 million.
Proctor said Gestamp, which has its U.S. headquarters in Michigan, made its facility too small.
"It's evident space is at a premium," he said.
The plant employs 162 workers and officials plan to bring the number to as many as 240 by year's end, the company official said.
"We're ramping up as VW continues to make more cars," he said.
Enterprise South has eight suppliers, including seven in VW's adjacent supplier park. Gestamp has its own facility off Hickory Valley Road.
Guenther Scherelis, the VW plant's general manager of communication, said Enterprise South parts suppliers often work just 45 minutes to two hours in advance of manufacturing, so proximity is key.
Gestamp had bought 18.5 acres at Enterprise South and had an option on the other 16.5 acres, Proctor said.
He said Gestamp decided to exercise its option on the entire tract for future expansion beyond the 30,000 square feet, though nothing is imminent.
VW is producing more than 100 newly designed Passats a day at its 1.2 million-square-foot plant with plans to grow that number rapidly the end of 2011.
The new midsize sedan is slated to go on sale on dealer lots in late September.