VW permit could include 'Phase 2' plant expansion in Chattanooga

VW permit could include 'Phase 2' plant expansion in Chattanooga

May 28th, 2014 by Mike Pare in Business Around the Region

Volkswagen plant tile

Volkswagen is seeking another air pollution control permit from Chattanooga regulators that could include "Phase 2" of the plant's construction, and documents cite another paint shop line and expansion of the factory's tank farm.

The process of providing public notice of the proposed permit application comes as VW officials continue to consider the Chattanooga plant to build a new sport utility vehicle line.

While the documents don't mention the SUV, they say that Volkswagen Group of America sees two phases of construction at the plant, with the second adding "a second painting line similar to the current Phase 1 paint line."

Bob Colby, who heads the Chattanooga-Hamilton County Air Pollution Control Bureau, said he understands that the company built the plant originally so the second paint shop line can handle more vehicles.

"They don't have to build another building for the paint line," Colby said. "When they built it originally, they extended the length of the the paint shop building and added room to put in added equipment to run more cars through."

Also, the permit documents note the plant's tank farm would be expanded during Phase 2. Currently, the farm consists of seven underground storage tanks for diesel, gasoline, ethylene glycol, windshield wiper fluid, power steering fluid, diesel emission fluid and brake fluid.

Two above-ground tanks hold waste purge solvents - one for the base coat lines and another for the clear coat lines. The purge solvent tanks will be "shared with Phase 2 operations once construction is complete, but the the new phase will have duplicates of the other Phase 1 tanks."

Bob Colby

Bob Colby

Photo by Doug Strickland /Times Free Press.

Last month, VW officials told air regulators in a letter that they were moving ahead with an initial factory expansion to support "existing and future product lines" and to start "Phase 2" construction. The company is building a $17.7 million warehouse connected to its assembly shop.

Scott Wilson, a Chattanooga VW spokesman, said the warehouse addition is connected to the Passat midsize sedan, which the company currently assembles.

He said Tuesday that the permit application is "standard pro forma" and has "nothing to do" with potential SUV production.

The company has said the second phase at the plant could eventually nearly double production capacity to 300,000 units a year if VW decides to make the investment.

Last year, the state offered VW nearly $300 million in financial incentives if the company added 1,350 more jobs in Chattanooga for the SUV. The state's offer sheet mentioned the addition of 960 VW production workers and 240 contractor employees. The state's proposal also cited the possibility of adding 150 "headquarter" or management employees.

VW has called the Chattanooga plant the front-runner to land the SUV over its operations in Mexico.

Colby said that once a plant becomes fully operational, it's required to obtain the so-called "Part 70" operating permit. VW originally submitted the application for the permit on April 13, 2012, the Bureau said. On March 31, 2014, the Bureau finished its review and is recommending issuance of the permit.

Colby said the Bureau is giving public notice so people can comment on the proposal. Notice was advertised in the Chattanooga Times Free Press last Friday. Colby said there's "no hidden meaning" in the timing of the notice.

He expected the Air Pollution Control Board will take up the issue soon.

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