A new venture making seats for the car Volkswagen will produce at its Chattanooga assembly plant will create about 120 jobs here, officials said Tuesday.
Hollingsworth Logistics, a Michigan supply chain firm, and Magna Seating, a subsidiary of one of the world's biggest auto parts companies, are joining to create Chattanooga Seating Systems.
Jeff Fuller, Chattanooga Seating's general manager, said the company has leased space at Shallowford Business Park East off Highway 153.
The company will conduct training and make sure it can support the first test cars of the new vehicle soon to be made at the nearby VW plant, Mr. Fuller said.
He said negotiations are ongoing for another building in which to place seat production. Officials declined to say where that building is or if it will be in the supplier park VW is developing near its Enterprise South industrial park assembly plant.
But hiring for the seat maker is expected to start over the next couple of months and go into the fall, said Mike McNamara, chief operating officer for the minority-owned Hollingsworth.
He wouldn't comment on pay levels but said the company is "committed to a fair rate with what's being paid in the area right now."
"We're very excited to come to Chattanooga and bring jobs," Mr. McNamara said.
Scott Worden of Magna International of America Inc. said the company wouldn't disclose how much Chattanooga Seating is investing in the operation.
Guenther Scherelis, general manager of communication for VW's Chattanooga operations, said it's pleased to have a minority-owned joint venture as one of its suppliers.
"The partnership is a great sign," he said. Production at the VW plant is to start in about a year.
Jeff Jennings of NAI Charter Real Estate Corp. said Chattanooga Seating will occupy 7,825 feet at the Shallowford business park.
"It's exciting to help the landlord we represent capitalize on the momentum of VW," Mr. Jennings said.
Matt Kisber, state Economic and Community Development commissioner, said Chattanooga Seating's plan reaffirms the state's attractiveness to manufacturing.
"VW made it clear when it announced its decision that it would be a Tennessee company and do all it could to help put strong roots in the ground to establish a long-term relationship," he said.
Chattanooga Seating is expected to receive state tax breaks for equipment and employee training.
Tom Edd Wilson, the Chattanooga Area Chamber of Commerce's chief executive, said the seat company is "one of the fruits of our labor" in attracting the German automaker.
"That's a good number of jobs, and they're manufacturing jobs," he said. "I'm sure the wages will be attractive."
Trevor Hamilton, the Chamber's vice president of economic development, said it recruited Magna in the past.
"To have them attracted here through the joint venture is gratifying," he said.
Mr. McNamara said officials are looking forward to growing the business in Chattanooga.
* Headquarters: Dearborn, Mich.
* Business: Logistics services, warehousing, distribution, packaging and transportation
* Other: Privately held; minority certified as Native American
ABOUT MAGNA SEATING
* Headquarters: Novi, Mich.
* Business: Automotive seat maker employing about 2,300
* Other: Subsidiary of Magna International, which has more than 70,000 employees worldwide
"We absolutely want to do more work with Volkswagen," he said.
Mr. Worden said Magna already builds parts for VW in Mexico and has seat contracts in Europe for VW unit Audi and Porsche. Magna, based in Canada, is one of the world's largest auto parts suppliers with 238 manufacturing operations in 25 countries over five continents.
Earlier this year, VW officials said its supplier park initially will have six companies and employ about 500 workers, and the German automaker planned to try to boost that number.
The supplier park is to open this summer next to the carmaker's $1 billion factory that is to employ more than 2,000 people. VW officials said two 223,000-square-foot buildings will occupy the 41-acre supplier park.