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Gov. Bill Haslam meets Micah, left, and Andy Hodes on Thursday at the Jewish Federation of Greater Chattanooga.

Gov. Bill Haslam says Israel and Tennessee have "an obvious connection" related to health care and other sectors, and Chattanooga has a leg up to woo some of that business.

"We catch heat about being low-cost. We're low-cost compared to New York, San Francisco and L.A.," Haslam said in Chattanooga on Thursday.

The governor, fresh off a jobs recruitment trip to Israel, cited work done at Erlanger hospital that he learned about in which surgeons are using Israeli technology to help stroke victims.

"Chattanooga has some advantages in that," he said of an idea raised by Erlanger physician Dr. Thomas Devlin to make the city a low-cost entry point for Israeli companies to get into the U.S. market and through federal regulatory testing.

Devlin, who directs the Southeast Regional Stroke Center, said Israeli companies don't want to go to places such as California or Boston.

"We have an opportunity to do this here. We have all the right business acumen, technology, health care research to do this," he said.

Haslam, who took an 18-person delegation to Israel, said that's the kind of connection he tries to make on such trips.

"One of the reasons I go on trips like this is to help enable those connections," he said to about 100 people at the Jewish Cultural Center.

The governor said he was impressed by Israel's entrepreneurial spirit and technical know-how, which he termed unsurpassed around the world in a per-capita basis.

"I have great hopes for the future of the relationships and connections we made there," Haslam said. He added there already have been second and third connections since the business recruitment venture.

He said he met with Israeli Prime Minister Benjamin Netanyahu and the country's former president Shimon Peres, while on the trip, which took place from Aug. 29 to Sept. 3 and included business leaders such as CBL & Associates Properties Inc. executive Michael Lebovitz.

Haslam, in remarks after the meeting, also addressed the ongoing Volkswagen emission scandal, saying his biggest concern is that the German automaker will lose market share in the U.S.

"If they're not selling cars, they're not employing people here and that affects all the suppliers, as well," he said. "I worry that a lot of other companies, auto suppliers in Chattanooga and this part of Tennessee, if their business is off a lot of other suppliers are affected, as well."

But Haslam said he thinks that the state's investment in Volkswagen in Tennessee is safe.

"If Volkswagen doesn't create jobs, make the capital investment and doesn't maintain those jobs, they owe us that money back," he said.

Tennessee government provided an estimated $358.2 million of the original $577.4 million in incentives that drew Volkswagen to build its Passat sedan in Chattanooga. Local governments provided the remaining $219.2 million.

This year, the Tennessee, Chattanooga and Hamilton County governments committed to more than $260 million in incentives for a new line of SUV production.

Late last month, Volkswagen admitted that it installed software in diesel vehicles to defeat emissions tests. An estimated 11 million vehicles worldwide, including in the U.S., are affected, according to the company.

Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.

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