Volkswagen of Chattanooga wins Corporate Handout Classic.
This is a framegrab from a Volkswagen commercial for a vehicle with their TDI Clean Diesel engine. A federal consumer watchdog sued Volkswagen Tuesday, March 29, 2016, charging the company made false claims in commercials promoting its "Clean Diesel" vehicles as environmentally friendly. (Volkswagen/Youtube via AP) Tennesseans have crowned Volkswagen of Chattanooga the champion of a new tongue-in-cheek contest known as "the Corporate Handout Classic."
VW, which has received $840.3 million of state tax breaks and subsidies for its Chattanooga assembly plant and its ongoing expansion, was picked by more than two thirds of the voters in the March Madness style tournament sponsored by the conservative Beacon Center of Tennessee.
Volkswagen won out in the final contest over Wacker Chemical, which got more than $200 million of tax breaks and assistance to help build its $2.4 billion polysilicon plant near Charleston, Tenn. The incentive packages offered to Volkswagen to intially locate in Chattanooga and then to expand the plant are the biggest ever offered to an automotive facility, according to Good Jobs First, which tracks such deals.
Beacon CEO Justin Owen said hundreds of votes were cast in the online voting, which the center created this year to draw attention to what Owen calls corporate subsidies. He noted that the state subsidies for VW were awarded prior to the announcement last September that the German automaker had tried to rig emission tests for its diesel engines.
Volkswagen has vowed to fix the emissions problem and continues to move ahead with a $900 million expansion of its Chattanooga plant despite a recent drop in sales after the carmaker was forced to suspend sales of its diesel Passat models. The plant expansion at VW will add a second vehicle line and add 2,000 more direct jobs and, according to a University of Tennessee study, spur the creation of another 7,800 support and indirect jobs in the region.
The UT Center for Business and Economic Research has projected that the VW assembly plant and the expansion for a second vehicle combined could generate nearly 20,000 direct and indirect jobs as more automotive suppliers and other businesses are drawn to the region. The study predicted construction of the plant addition would create 5,391 jobs during its building phase and ultimately spur $372.6 million of additional income in the region. That should inject $35.1 million of new tax revenue every year into state and local tax coffers, which over time will more than offset the subsidies and tax breaks given to Volkswagen, according to the UT study.
But the Beacon Center believes such targeted subsidies for particular businesses are unfair and result in government picking winners and losers. Owen billed the online voting contest in the final round as a battle between VW's "Das Stealing" and Wacker's "The Chemicals Between Us."
"After Villanova's thrilling victory last night, the madness ended for basketball fans," Owen said Tuesday in announcing the results. "Unfortunately for Tennesseans, their tax dollars continue to be spent on corporate favoritism. Volks- wagen's victory in Beacon's Inaugural Corporate Handout Classic is a clear indication from taxpayers that it's time for taxpayers to hold their government accountable."
The Chattanooga, Hamilton County, Tennessee and Chamber of Commerce officials who negotiated the incentives for Volkswagen declined comment or didn't respond to inquiries about the results of the online poll on Tuesday.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.