Published: December 11, 2008 03:27 pm      

Tennessee officials look forward to VW cooperation

WOLFSBURG, Germany (AP) — Tennessee officials, including Gov. Phil Bredesen, said Wednesday, Nov. 5, that Volkswagen AG's decision to build a new plant in Chattanooga was clearly a bonus for the state and they were looking forward to working together.

Touring Volkswagen production facilities on a trip to learn about the company and contact supplier companies in Germany, Bredesen said that Volkswagen still had all intentions to carry through with its plans for the Tennessee facility, despite the current world economic situation.

"We've not heard that Volkswagen has any different intentions," Bredesen said.

He and members of the state office of Economic and Community Development said the decision by Europe's biggest automaker by sales to come to the Volunteer state was clearly of great importance for the state's economy.

"It's had a big impact for the state so far," Bredesen said. "Volkswagen is a strong company with a strong balance sheet."

The plant, due to open in 2011, is expected to employ 2,000 people and another 9,500 people will most likely be employed by supplier companies that will have to set up nearby. Ground is expected to be broken for the $1 billion facility in the first quarter of 2009 and is expected to open in 2011.

On Wednesday, VW Chief Executive Martin Winterkorn also confirmed the company's earnings target for 2008, but said 2009 would be a tough year for the entire industry in light of the world economic situation.

Asked what had driven Volkswagen to pick Tennessee over other states, including Alabama and Michigan, that vied for the company, Bredesen said Tennessee had not been at the top in terms of the incentives offered, but its long history of manufacturing, good educational system and infrastructure lifted it to the top.

Furthermore, it has two other car makers that have attracted professional operational knowledge of the industry and suppliers already. Nissan and General Motors both operate near Nashville.

"Tennessee has a good business climate," Bredesen said. "We've always been a business friendly state with a good legal structure, low costs and tax structure. We've got the basics right."

Bredesen said he thought German companies that were interested in moving to the state would be granted those operational benefits as well.

Tennessee is also centrally located, said Brock Hill, the mayor of Cumberland County, located about 60 miles north of Chattanooga.

"Tennessee is about a day's drive from 70 percent of the people in America;" an important factor in VW's decision, he said.

The state's rail system was also a key advantage the state could offer Volkswagen logistically, Hill said.

He and other mayors were along for the trip meeting Volkswagen officials and hoping to attract suppliers to their communities. He said the Tennessee group was headed to Munich, Duesseldorf, and Frankfurt to meet with several companies.

Hill doesn't drive a Volkswagen yet, but he might be soon.

"This is very important, especially in times like these. Creating jobs, it's exciting," he said.