Tennessee: VW effect beats $55 million so far in contract work

Tennessee: VW effect beats $55 million so far in contract work

February 10th, 2009 by Mike Pare in Business

Work related to Volkswagen's planned auto assembly plant has fueled more than $55 million in area contracts so far with only about 10 percent of the project bid out, officials said Monday.

Countering concerns about using companies from outside Chattanooga and the state, a VW official said the automaker itself has accounted for over $10 million in local contracts as work on the first plant building started less than two weeks ago.

"We are pleased Tennessee businesses are benefiting," said Jill Bratina, the company's corporate communications director, adding officials are looking "to continuing to work with the community as the project moves forward."


VW officials say 37 companies in the region have received contracts for VW work so far and nearly 20 are Tennessee based.

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J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, said more than $45 million has been spent by the city, Hamilton County and the state on contracts with regional companies on site prep work since last May.

Also, another $10 million to $15 million will be spent by the government entities on site prep before VW starts making cars in early 2011 at the $1 billion plant, he said.

"In these challenging economic times, this is the kind of investment to gain further private investment from VW," Mr. Marston said. "This is a significant opportunity that is benefiting local business and Chattanooga area workers."

The heads of two Chattanooga contractor groups said last week they hope their members will see their fair share of the huge construction project. Their comments came as a Michigan builder was alleged by the state to have done VW work without a Tennessee license.

Ms. Bratina said that on the $30 million paint shop job awarded to a different Michigan firm, Walbridge, half of the contracts awarded so far are local. On the project, 53 Tennessee subcontractors and suppliers responded with bids, she said.

Also, Ms. Bratina said, VW achieved its 10 percent minority participation goal so far.

Of the $377,000 spent to revamp VW offices at Chestnut Tower downtown, 90 percent of the work went to local companies, she said.

Ms. Bratina said companies such as Walbridge along with SSOE, of Ohio, and Alberici, of St. Louis, which are overseeing engineering and construction management at Enterprise South industrial park, have previous auto plant experience.

"They possess expertise at doing auto plants," she said. Ms. Bratina said Walbridge is "one of the leading auto facility contractors in America," citing its work with Toyota and Ford.