Haslam hopes Chattanooga gets VW settlement's $2 billion for zero-emissions technology

Haslam hopes Chattanooga gets VW settlement's $2 billion for zero-emissions technology

June 28th, 2016 by Andy Sher in Business Around the Region

The Volkswagen manufacturing plant is seen on Thursday, June 16, 2016, in Chattanooga, Tenn. This fall, 27 Hamilton County high school juniors will enroll in Volkswagen's new Mechatronics Akademie where they will spend 2 years learning how to run and maintain industrial robots.

Photo by Doug Strickland /Times Free Press.

NASHVILLE — Gov. Bill Haslam says he has "strong hopes" of seeing Volkswagen's Chattanooga operation get some of the $2 billion in spending on zero-emissions technology required under the auto manufacturer's far-reaching settlements with the federal government, car owners and dozens of states.

"Part of their agreement is that they will spend $2 billion more on zero-emission vehicles," the governor told reporters Tuesday in Nashville. "Obviously we would like that to happen in Chattanooga."

But Haslam, who said he spoke with VW officials Tuesday, emphasized "there's not been a commitment for that to happen.

"But they have said that our manufacturing for North America is going to be centered in Chattanooga, and we certainly hope that a lot of that money for zero-emission vehicles happens right there," Haslam said.

VW announced an agreement Tuesday to spend up to $15.3 billion to settle its emissions-cheating scandal on some of its diesel models made since 2009. The vehicles had software designed to evade state and local government emissions testing across the U.S. and it was revealed the company's clean diesel claims for its vehicles didn't match reality.

As part of the agreement, Volkswagen will contribute $2.7 billion in a trust to fund environmental programs nationwide to reduce nitrogen oxide emissions. Haslam said he believes Tennessee could see $42 million for its environmental programs.

The company is also being required to spend $2 billion to "promote" the market for battery-electric or hydrogen fuel cell vehicles. That's on top of what the company has already earmarked for alternative-fuel technologies.

The EPA is requiring that Volkswagen invest $800 million in California and $1.2 billion throughout the rest of the nation over the next decade for zero-emission vehicle support, including electric vehicle charging stations.

The German auto manufacturer, which assembles its Passat vehicles in Chattanooga and is building other facilities in Chattanooga for engineering research and SUV vehicle production, has pledged to boost its production of electric vehicles. The Chattanooga assembly plant — the company's biggest U.S. facility and the first automotive assembly plant to earn the top Gold LEED (Leadership in Energy and Efficiency Design) certification anywhere in the world — could be used to produce battery-powered cars in the future, Haslam said.

"They've obviously been a little hamstrung in what they could talk about while they were negotiating the settlement," Haslam said. "But we've made it clear to them that we would love to have any of that happen in Tennessee. With $2 billion in zero-emission manufacturing capacity, we would have strong hopes that could happen in Chattanooga."

Haslam said in his conversation with company executives Tuesday morning "they assured me, obviously, the company will be able to take this. Obviously that's a big setback for anybody, but that their plans won't change and everything they said they will do in Chattanooga, they still intend to do.

"So," the governor added, "I think that's good news."

"I think the biggest thing for Tennessee, obviously, because of our investment in Volkswagen Chattanooga and their investment there is, are they going to carry through with what they said?" Haslam said. "Their answer was an unequivocal yes."

Contact Andy Sher at asher@timesfreepress.com.


This story was updated June 28 at 11:55 p.m.


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