Tennessee's car assembly plant growth touted at Southern Automotive Conference in Chattanooga

Tennessee's car assembly plant growth touted at Southern Automotive Conference in Chattanooga

October 13th, 2012 by Mike Pare in Business Around the Region

New Volkswagen Passats are seen behind the Chattanooga assembly plant's building.

Photo by Dan Henry/Times Free Press.

Frank Fischer is the CEO of Chattanooga Operations for Volkswagen.

Photo by John Rawlston/Times Free Press.

Less than two years after Chattanooga's Volkswagen plant started making cars, officials expect 2012 production to hit the 150,000 level for which the factory originally was built.

Next year, the plant could churn out up to 180,000 cars as VW tweaks the facility to add capacity, said Frank Fischer, chief executive of the automaker's operations in the city.

"It depends on sales figures," Fischer said at the Southern Automotive Conference in Chattanooga on Friday.

All three of the car companies that run assembly plants in Tennessee are growing, officials told about 500 people at the meeting of auto manufacturers from Tennessee, Alabama and Mississippi.

Donald Stoegbauer, director for Nissan North America, said its Smyrna, Tenn., plant is adding 1,200 more workers to support production of the all-electric Leaf and other vehicles.

He said the Rogue crossover will be assembled in Smyrna, moving from Japan.

"It's build them where you sell them," Stoegbauer said.

In addition, a battery plant to support the Leaf has started production and has the ability to make 200,000 a year, he said.

In nearby Decherd, Tenn., Nissan's engine plant will start making electric-drive motors in 2013, Stoegbauer said. Earlier this year, workers broke ground on an expansion to build engines for a Mercedes-Benz/Renault-Nissan venture.

Bill May, site manager for General Motors' Spring Hill, Tenn., manufacturing facility, said it has more than 1,800 employees, up from under 1,000 two years ago.

"GM has been a big player in the South," he said. "We lost some of that. Now we're back. We're back in Tennessee."

Spring Hill earlier this year started building the Equinox sport utility vehicle as it began assembly operations again. GM also does parts stamping and builds engines at its huge 6.9 million-square-foot facility.

Fischer said that while production continues in Chattanooga on the midsize Passat sedan, "we're trying to fight for a second model."

He said approval is a two-step process by top VW officials. There's a decision over whether to build the vehicle, and then where, Fischer said.

The VW official said production at the plant this year will finish slightly higher than originally predicted.

"It's not just the product," he said. "It's the level of quality."

Jay Williams, the federal government's so-called "car czar," recalled that the domestic auto industry was "a shambles" in 2009.

While America is "still fighting our way out" of what was the deepest recession in a century, government efforts to save General Motors and help the auto industry paid off, he said.

Williams said about 1 million jobs were saved.

"There's still more work to be done," he said.

U.S. Sen. Bob Corker, R-Tenn., told the group the best step the federal government can do is take care of its fiscal problems.

"The single thing holding back large capital investment is the uncertainty of Washington dealing with looming fiscal issues," he said.

Corker said he's optimistic Republicans and Democrats will come together to deal with budget difficulties.