Incentives part of VW talks, Chattanooga, Hamilton County mayors say

Incentives part of VW talks, Chattanooga, Hamilton County mayors say

June 8th, 2013 by Mike Pare in Business Around the Region

Mayor Andy Berke

Hamilton County Mayor Jim Coppinger is seen in this file photo.

Photo by Dan Henry/Times Free Press.

State and local officials talked financial incentives with top Volkswagen brass this week in the effort to lure production of a possible new sport utility vehicle to Chattanooga.

"No doubt it takes incentives," said Hamilton County Mayor Jim Coppinger on Friday.

Coppinger, Chattanooga Mayor Andy Berke, Chattanooga Area Chamber of Commerce Vice President for Economic Development Charles Wood and two state officials traveled to VW's headquarters in Wolfsburg, Germany.

Berke said the Tennessee delegation met with key VW officials including Michael Macht, the automaker's board of management member in charge of global production.

"They're working hard on this project right now," Berke said.

While neither mayor gave a specific time frame by which a decision may come from VW, they said discussions were productive.

"It was very positive," said Coppinger, adding that VW made no commitment about whether it will pick Chattanooga as the site to produce the SUV.

Berke said he and Coppinger had "an excellent" day and a half of meetings.

"Volkswagen understands that the locals are committed to ensuring the long-term success of the plant," Berke said.

VW officials have said they're looking at producing a new SUV that would compete with vehicles such as the Ford Explorer, Honda Pilot and Toyota Highlander. Chattanooga and VW operations in Mexico are competing for the project.

Earlier, U.S. Sen. Bob Corker, the former Chattanooga mayor who helped negotiate some of the final details of the 2008 incentives package to lure VW to the city, said he's convinced the carmaker will someday add to its facility.

"I don't think there is any question in my mind that at some point, Volkswagen is going to use the rest of their site (in Chattanooga)," Corker said following a recent speech at the Tennessee Valley Corridor Summit. "I don't know which model it's going to be, but I know they are very happy with the relationship they have with us in Tennessee and (VW CEO Dr. Martin) Winterkorn and I talk fairly often about a range of issues."

Five years ago when VW announced it was putting its only U.S. plant in Chattanooga, the company received a package of state, local and federal incentives valued at $577.4 million. That's believed to be a record for a new U.S. auto plant.

State officials taking part in the meetings this week were Josh Helton, senior advisor for corporate outreach and special projects at the Tennessee Department of Economic and Community Development, and Will Alexander, ECD's chief of staff.

Clint Brewer, ECD's assistant commissioner for communications and marketing, said it's no secret VW's Chattanooga plant was designed for a second line.

"Anytime VW is pursuing an expansion, Chattanooga will be competitive and the state will be leading the charge," he said.

Business Editor Dave Flessner contributed to this story.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.