Chattanooga: Chicago firm to build VW buildings

Chattanooga: Chicago firm to build VW buildings

April 7th, 2009 by Mike Pare in Business

Work on the key buildings of Volkswagen's $1 billion auto assembly plant in Chattanooga are expected to be under way soon.

Volkswagen on Monday announced it has awarded a $63 million contract for Chicago-based Graycor to construct the plant's assembly and body shops at Enterprise South industrial park.

Work on the plant's paint shop began earlier this year, and construction of a $40 million training center will start this spring.

Graycor Construction Co. also will build a technical center and social area, which will house plant-related administrative functions, according to the automaker.

Graycor will source more than 60 percent of its job to local contractors, the automaker said. Graycor has also committed to sourcing 11 percent of the contract to minority and woman-owned suppliers.

Roger Tuder, executive director of the Associated General Contractors of East Tennessee, said he would like all work to go to local contractors, but 60 percent is "outstanding."

"That's a good starting point," he said. "We'd certainly encourage VW to use as many local qualified contractors as possible. We look forward to same level of participation for the entire project."

Mr. Tuder said 11 percent minority participation is "a very good number."

He said 8.67 percent of the minority population in the area is involved in the construction industry.

Construction by Graycor will begin at the end of April. The facilities are scheduled to be weather-tight by the end of 2009.

Frank Fischer, chief executive of Volkswagen's Chattanooga operations, said Graycor showed it has the expertise to perform the job and demonstrated it shares VW's commitment to local and diverse procurement.

"We were extremely impressed that Graycor went above and beyond our content targets by pledging to source a substantial portion of this project to local and minority and woman-owned companies," Mr. Fischer said in a statement.

David McAllen, president of Graycor Construction, said that as technology increases, so do the complexities of building car plants.

"Graycor Construction has been innovating more effective and efficient construction processes for top automakers for more than four decades," he said.

The assembly plant, which is slated to make a new midsize sedan, is to start production in early 2011 and employ about 2,000 people.