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The Chattanooga area should build on landing Volkswagen and Alstom's big expansion, but it ought to identify other target sectors to diversify the economy, a new strategic plan says.

"Chattanooga is a hot topic right now," said Tom Edd Wilson, the Chattanooga Area Chamber of Commerce's chief executive, adding that companies and site selectors are taking a hard look at the city in the wake of VW's and Alstom's massive investments.

The new plan developed by the Chamber, Hamilton County's chief job-growth group, also calls for:

* Offering more support for small businesses and existing companies to add local jobs.

* Providing a new focus on regionalism.

* Continuing to bolster the work force and education.

The strategic blueprint comes as Hamilton County's unemployment rate hit a 27-year high in January. Joblessness rose to 10 percent, up eight-tenths from December, as the area recovers from the recession. Still, that's better than the state rate of 10.7 percent in January.

The strategic plan doesn't set any new job or investment goals for the business group. Those numbers could come soon as the Chamber gears up for another jobs campaign to replace Chattanooga Can Do which ends next year, Mr. Wilson said.

He said plans are to start raising private money for the next jobs initiative this year with fund-raising to be finished by the time Can Do concludes in mid-2011.

"We don't know what it (the new jobs campaign) will be called," Mr. Wilson said.

The Chamber's strategic plan approved by its board this month - only the second such blueprint since Mr. Wilson took over the Chamber's helm in late 2001 - calls for the business group to restructure its small business efforts to spur more jobs locally.

It plans to offer its Business Development Center services to all small companies in Hamilton County. That restructuring will be done along with a $5 million renovation of the small-business incubator on Cherokee Boulevard owned by the city and Hamilton County.

The plan said that "local companies create most jobs and small businesses represent our greatest potential for sustained economic growth."

Future targets

Meanwhile, the Chamber may hire a firm to help it probe future target industries for the Chattanooga area in addition to building on the automotive and power generation sectors.

"We could come up with something off our radar," said J.Ed. Marston, the Chamber's vice president of marketing. "We'll evaluate our assets and what targets we could go after."

The Chamber plan calls for a stronger emphasis on attracting entrepreneurs who will relocate existing companies to the area.

Concerning regional cooperation, Chamber officials said it's a challenge but needed if the area is to reach its full potential.

"We need to do a better job of competing as a region rather than a city," Mr. Wilson said. "Everybody benefits from that."

While the business group doesn't have any ability to create or enforce regional policy, it can act as a convener and coordinator for cooperation, according to the plan.

Regarding the work force, Cheryl Millsaps, the Chamber's vice president of finance and administration, said business leaders are concerned that Hamilton County produce highly trained workers.

"Work force preparation continues to be a key issue," the plan said. The Chamber cited its partnership with Hamilton County Schools, UTC, and the Public Education Foundation to set up the Principal Leadership Academy.

In the Chattanooga metro area, the recession has cost 12,300 jobs in the past two years, according to the U.S. Bureau of Labor Statistics.

At the end of 2009, the number of jobs in Chattanooga was 238,300, unchanged from a decade earlier.

But, Volkswagen is building a $1 billion auto assembly plant in the city that is slated to employ over 2,000 people. Production is to start in about a year.

Alstom is adding about 360 people to its 600-member work force in the city as it injects $280 million into its Riverfront Parkway facility. Alstom will make steam and gas turbines as it seeks to capture business related to nuclear and fossil power plant construction in the United States.

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