Official: Tennessee has 'work to do' to get VW to bring SUV production to Chattanooga

Official: Tennessee has 'work to do' to get VW to bring SUV production to Chattanooga

February 19th, 2014 by Andy Sher in Business Around the Region

Volkswagen Chattanooga

POLL: Should VW get more state incentives?

This Volkswagen image shows the midsize SUV VW plans to build for the American market.

This Volkswagen image shows the midsize SUV VW...

Photo by Contributed Photo /Times Free Press.

NASHVILLE - Despite Volkswagen workers' voting down union representation last week at the company's Chattanooga plant, Tennessee's chief economic recruiter says more needs to be done to persuade the German manufacturer to bring a new line of SUV production to Southeast Tennessee.

"I think we've got some work to do to make it happen," state Economic and Community Development Commissioner Bill Hagerty said Tuesday. "I'm not taking anything as a given. And our plan is we review every project. We're going to put our best foot forward and be as competitive as we can."

As Volkswagen workers began voting on United Auto Worker representation last week, anti-UAW critic and U.S. Sen. Bob Corker, R-Tenn., said he had been "assured" by unnamed sources the company would manufacture the SUV in Chattanooga if employees said no to the UAW.

Union officials and Democrats accused Corker of meddling and asserted the former Chattanooga mayor may have overstepped federal law governing union certification voting.

Asked about Corker staking his reputation on that, Hagerty said, the senator "has been involved with this for a lot longer than I have [with Volkswagen]. He was involved in the very beginning to recruit Volkswagen to the state, and he has deep connections into the company."

Hagerty said he's "not been a part of his discussions with the company, and I can't tell you who his sources are because I simply don't know. But I've never known Sen. Corker to speak out of school or say something that wasn't true."

Hagerty said Volkswagen officials were in contact with state officials Tuesday to restart discussions on economic incentives associated with plant expansion. The state's original offer, details of which have not been disclosed, recently expired.

"We have been in discussions with the company for a long time about locating a second line in Chattanooga, and the discussions have just picked up this morning," Hagerty said. "The company reached out to us this morning to get restarted on them."

Gov. Bill Haslam told reporters during a visit in Murfreesboro on Tuesday the state doesn't rule out incentives for a company just because it has a union.

"It's never been a litmus test," the governor said. "Obviously the state's incentivized union (companies) in the past."

Haslam last week urged workers to vote against the UAW representation, which he said would make it harder to lure the suppliers VW needs for an expanded product line.

"I was just making the point that one of the things VW kept saying to us was we want to have a closer supplier network if we're going to grow that plant," Haslam said. "And I know from what suppliers have told us that that would be a lot harder to do if the UAW was there."

How big an incentive package the state will put on the table remains to be seen. In recruiting Volkswagen originally, then-Democratic Gov. Bill Haslam put together a $577 million package -- the largest batch of incentives ever offered for an auto plant.

Both Hagerty and Haslam say the plant was built to accommodate a second line of production. And much of the key infrastructure such as utility lines, a new freeway interchange, roads and the like were done in 2008.

Contact Andy Sher at or at 615-255-0550.