Business Briefcase: Local VW plant creating ripples

Business Briefcase: Local VW plant creating ripples

January 29th, 2012 by Mike Pare and Dave Flessner in Business Around the Region

Local VW plant creating ripples

Chattanooga landing Volkswagen's auto assembly plant helped push Indiana Gov. Mitch Daniels into supporting a right-to-work law in that state, according to Forbes magazine.

Daniels said he was frustrated that his state was losing opportunities to compete for projects with other states that have such laws, which prevent unions from collecting mandatory dues.

"I couldn't get VW to return our call," the governor said, adding that "we couldn't even get them to talk to us."

A Volkswagen spokesman declined comment, according to Forbes.

State ranks 14th in tax climate

Tennessee ranked 14th among the 50 states in a new study by the Tax Foundation of states' business tax climate.

In its eighth annual ranking, the Tax Foundation gave high marks for personal income and corporate tax rates in Tennessee. But the tax group rated the Volunteer State among the bottom 10 for its sales and property taxes on business.

The foundation, established in 1937 to educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government, ranked Wyoming as the best state and New Jersey as the worst state for their business tax climates. Georgia ranked 34th in the study.

The rankings are based upon how the elements of a state tax system enhance or harm the competitiveness of a state's business environment, not how much residents pay in taxes each year.

"Even in our global economy, a state's stiffest and most direct competition often comes from other states," Tax Foundation economist Mark Robyn said in a statement. "State lawmakers need to be aware of how their state's business climates match up to their immediate neighbors and to other states in their region."

Home care firm wants to expand

Right at Home, a franchised home health care service provider, wants to expand into the Chattanooga market.

Tom King, director of development for the Omaha-based company, said "Chattanooga is a a major, vibrant market that we are eager to go in" with the right franchisees. Founded in 1995, Right at Home topped $200 million in sales last year through its 200-plus offices across the United States, the United Kingdom and Brazil. Outlets are franchisee-owned and operated and provide care ranging from companion care a few hours a week up to skilled nursing care around the clock.

"In the U.S., a person turns 65 years old every eight seconds, and there are more than 74,000 seniors in Hamilton, Marion and Sequatchie counties," King said. "We are looking for good franchisees to bring our service to this market."

Bank failures first since 2002

The failed Tennessee Commerce Bank in Franklin, Tenn., and BankEast in Knoxville, which regulators seized Friday night, will reopen Monday as branches of the Louisville-based Republic Bank & Trust and the Cincinnati-based U.S. Bank, respectively.

The bank failures are the first in Tennessee in a decade. The Federal Deposit Insurance Corp., which insures bank deposits and is directing the weekend bank shutdowns and ownership transfers, estimates it will lose $416.8 million from the failure of Tennessee Commerce Bank in Franklin and $75.6 million from the BankEast failure in Knoxville.

But the orderly transfer proves that the banking system is working and customer deposits are protected, according to Tennessee Bankers Association President Brad Barrett.

"The overall Tennessee banking industry remains healthy," Barrett said. "These are the first bank closures in Tennessee since 2002, and the fact it's been more than three-and-a-half years since the economic crisis of 2008 began in earnest is a reflection of the general strength of the industry here."