A key Volkswagen supplier plans to seek city tax incentives to potentially build a $48 million expansion to one of its Chattanooga plants and hire 150 more workers to make parts for another automaker.
Gestamp, which provides stamped parts for VW's Chattanooga assembly plant, wants to win business from the other auto company which makes vehicles in another state, said Corey Jahn, plant director for the company's Hickory Valley Road plant.
FAST FACT
In partnership with Hamilton County Schools, Gestamp houses Tennessee’s first work-based learning program to earn a U.S. Department of Labor registered apprenticeship designation.
Jahn told city council members on Tuesday that the expansion would add about 125,000 square feet of space - if Gestamp is able to get the work. He said that the expansion wouldn't be done if Gestamp doesn't win the business and the company wouldn't need the new payment-in-lieu-of-tax (PILOT) agreement with the city.
Jahn said the company, which has three plants in Chattanooga, should find out within about five months if it wins the work. He didn't release the name of the other automaker.
Steve Hiatt, director of existing business development for the Chattanooga Area Chamber of Commerce, said Gestamp already employs 750 full-time workers in the city along with 100 temporary employees.
The expansion would put Gestamp at about 900 full-time employees, he said.
Hiatt said the new jobs would average about $47,000 a year if it secures the PILOT that could come up for a vote in a couple of weeks.
"It's really good for the Chattanooga economy," he said.
Hiatt said the company is seeking a three-year extension of its existing PILOT. He said the property tax abatement would be at 50 percent over the period, though the company would pay school taxes.
Several city council members indicated their support for Gestamp, citing its existing apprenticeship program for local high school students.
Council member Carol Berz said she hears "a lot of good talk with what you're doing."
"Wages are good," she said. "You're giving people chances to move up the ladder."
Councilman Chip Henderson said Gestamp is "a template to what businesses and manufacturers could be in Chattanooga."
"You've gone and blown it out of the water," he said.
Councilman Darrin Ledford said the city panel has been "under scrutiny for PILOTs. This is one that works."
Jahn said the Hickory Valley Road plant would increase to 675,000 square feet if the expansion is constructed.
In February, Gov. Bill Lee made his first official trip to Chattanooga where he visited the Gestamp plant on Hickory Valley Road.
Lee met with high school students who are part of its work-based learning program and attended a roundtable on vocational education hosted by the Chattanooga Area Chamber of Commerce.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.