After months of intense talks, Volkswagen officials said Wednesday a supplier park that could hold 15 companies or more will go up next to the automaker's Chattanooga assembly plant.
Frank Fischer, chief executive for VW's Chattanooga operations, wouldn't name any companies, but he said some will be assembly businesses while others will store parts made elsewhere and get them ready for the production plant.
"There will be some sequencing work, some assembly work. Some suppliers will share the same buildings," he said.
The announcement of the supplier park excited local officials who've spent months promising that supply companies would follow the $1 billion VW plant, causing an economic ripple. But so far, only one supplier has landed in the area.
Less than a mile from the Volkswagen plant at Enterprise South, Gestamp Corp. is building a $90 million plant that will employ 230 workers making stamped parts and welded assemblies for the new VW sedan's undercarriage.
"More jobs are coming," Hamilton County Mayor Claude Ramsey said.
Chattanooga Mayor Ron Littlefield said landing suppliers next to the factory makes it more likely that VW will expand its plant.
"We want the plant to be the most efficient it can be," he said.
Trevor Hamilton, the Chattanooga Area Chamber of Commerce's vice president of economic development, said the Chamber will be working with companies interested in landing in the supplier park and other locations in the region.
"It's good news for us," he said.
It's unclear how the supplier park will be financed, Mr. Fischer said.
"There are still different models on how to finance it and how to run it, but it's fixed," he said.
Typically, suppliers -- such as the makers of seats, auto cockpits, instrument panels and front ends -- are located close to an assembly plant.
The plant, on track to open in early 2011, and spin-off companies are expected to create more than 11,000 jobs, according to a University of Tennessee study.
On Wednesday, VW also released a new sketch of the midsize sedan that will be made at the Chattanooga plant and serve as the foundation of its aggressive foray in the United States.
Mr. Fischer said the first prototypes of the car, made in Germany, are running on the automaker's secret testing grounds there.
"I'm convinced it will be a success," he said.
Some people on the Chattanooga plant staff are assembling prototypes to get experience with the car and improve it, Mr. Fischer said.
In a related story, 12,000 online applications for jobs at the VW plant were filed in the first two days that the automaker started accepting inquiries for production jobs, said Ryan Rose, general manager of human resource services for VW in Chattanooga.
"It's what we expected," he said. "We knew it would spike the first few days."
* VW has awarded about 95 percent of the equipment contracts for its plant.
* More than 30 percent of contracts awarded for plant construction have gone to local companies, which includes the Chattanooga area and the tri-state region.
* Suppliers awarded contracts will come to the city in December for discussions with VW about what the automaker expects in terms of quality.
On Monday, workers will start installing equipment inside the auto assembly plant's paint shop.