Since news of the Volkswagen emissions scandal broke, Chattanooga headlines have been dominated by Vs and Ws in big black bold letters.
"VW official: Company's existence is threatened."
"VW scandal: CEO says future ventures are under scrutiny."
"VW dealer says Volkswagen scandal makes Bernie Madoff 'look like the minor leagues.'"
"VW scandal could cost company $80 billion"
"VW reviewing future investments, but local officials remain upbeat on Chattanooga plant."
This is not just a Volkswagen story. It's a Chattanooga story.
It's our future. At the center are more than 10,000 Chattanooga area jobs if the planned SUV expansion should suddenly stall, or worse - the whole 4-year-old Bonny Oaks area plant folds. Bill Fox, director of the University of Tennessee's Economic and Business Research Center, says that job count breaks down to about 2,500 current Chattanooga VW jobs and another 2,000 future VW jobs, plus another 5,500 supplier and other "indirect" jobs.
As the headlines unfolded after EPA's Sept. 18 bombshell announcement that the German automaker had since 2009 deliberately rigged its so-called "clean diesel" cars to pass emissions tests with a "defeat device," there have been sabers rattling on all sides.
And rightly so. There is understandable outrage that VW knowingly developed and installed software to automatically turn off emission controls as soon as the emissions testing plug is pulled at testing facilities. From that moment until the next testing plug-in, the cars belch pollution in amounts up to 40 percent of the U.S. limit, and that limit is designed to reduce smog and health problems like asthma, heart and lung disease and premature death. Worldwide, about 11 million VW diesels carry this defeat device. In the U.S., the number is almost 500,000.
Last week, new VW CEO Matthias Mueller told employees in Germany the company will review its investments and "what isn't absolutely vital will be canceled or delayed." He said the company would have to put its future investments in plants, technology and vehicles "under scrutiny" to spend only what was needed to maintain a leading edge.
What that might mean for the $600 million Chattanooga SUV production line already underway - the one VW officials have previously said they believe is key to U.S. sales - is the question of the year.
"There's no reason to believe the plant won't move forward," said Hamilton County Mayor Jim Coppinger, adding that both he and Chattanooga Mayor Andy Berke have met with local plant officials separately since the emission scandal broke. "We think it's going to move ahead," Coppinger said.
Yet Mike Randle, publisher of Southern Business & Development, said the VW expansion isn't too far along to postpone it, and he worried about the proposed research center in downtown Chattanooga which has already hired 70 employees, 63 of which are engineers. "Don't pull the plug on the research center," he cautioned.
But up the road in Nashville may be where things really get complicated for Chattanooga.
Our state lawmakers - especially the conservative ones - are making noises about taking back the state incentives pledged to the expansion. Sen. Bo Watson, a Hixson Republican who has already called VW "un-American" and threatened to block the incentives a couple of years ago when VW scheduled a United Auto Workers union vote, has asked for an Oct. 29 hearing in Chattanooga to review the financial impact on the state from VW's violation of U.S. emissions standards.
Gov. Bill Haslam said Wednesday he still believes "the state has a solid investment" in VW, but his sway with the state's overly corn-pone General Assembly hasn't been consistent.
Tennessee provided an estimated $358.2 million of the original $577.4 million in incentives that persuaded Volkswagen in 2008 to locate its plant in Chattanooga to make the Passat sedan. Local governments provided the remaining $219.2 million. This year, Tennessee, Chattanooga and Hamilton County governments committed another $260 million plus in incentives for the new SUV production line. About $165 million of that is from the state, and there already are claw-back provisions on that money if VW doesn't produce jobs.
Certainly if VW bails on us, we need to claw back whatever of the incentives we can. But if VW hopes to - as it has pledged - regain customer trust and market value by building new cars here that will meet emissions testing, then the last thing our lawmakers need to do is shoot these 10,000 jobs in the foot. State Economic and Community Development Commissioner Randy Boyd told Times Free Press reporters that 50 percent of the total $930 million VW is investing in both developing the SUV and building the expansion is already spent or committed. Our lawmakers (and VW, too) would - as Rev. Jesse Jackson suggested last week - be throwing the baby out with the bathwater.
What VW did was criminal. We don't have to help them financially cripple 10,000 Chattanooga families as well.