Auto Suppliers Are In Demand In Tennessee
Volkswagen has parked its new U.S. assembly complex in Chattanooga, and the ripple effects from that $1 billion investment and plans for 2,000 direct jobs are already being felt.
In April 2009, M-Tek Inc. of Manchester landed a $147 million contract to provide interior door panels for a sedan set for production beginning in 2011. In June 2009, Tier 1 supplier Gestamp Corp. announced plans to invest $90 million for an auto parts stamping plant in Chattanooga that will create 230 jobs.
A study by the University of Tennessee’s Center for Business and Economic Research estimated the plant will boost incomes in the region by $511.1 million annually, generate more than $55 million a year in new tax revenues for state and local governments, and create 9,400 indirect jobs from construction and supplier activity.
Denso supplies several products to VW, including air conditioning compressors, HVAC units, condensers and cam timing control systems.
“We are always pursuing new business opportunities with automakers and, as VW is one of Denso’s customers, we welcome them to Tennessee. This is a great place to do business,” says Hugh Cantrell, general manager of automotive services for Denso Manufacturing’s Athens facility.
Brannan Atkinson, executive director of the Tennessee Auto Manufacturers Association, says an association event in December 2008 drew 175 people from Tennessee, Alabama and Mississippi eager to learn what Volkswagen was up to.
“People want to get in here right now and get close to the VW folks. They know the Tennessee auto industry is doing well,” he says.
Just up the road from Enterprise South Industrial Park, where Volkswagen is building its plant, Cleveland is getting ready for new business, says Gary Farlow, the president and CEO of the Cleveland/Bradley Chamber of Commerce.
“We’re still waiting for the big waves to break here,” Farlow says. “After the announcement, the state asked us to submit potential sites and buildings, and we turned in six. We’ve added two more since and identified some other public industrial park land. When they award the contracts, we’ll be ready.”
As of spring 2009, nearly $272 million in local contracts have been awarded by the city, state and VW.
That figure includes more than $204 million to VW contractors and subcontractors, with another $230 million in contracts planned over the next 20 years.
Construction began in May 2009 for a training center on the Enterprise South site that will house a 160,000-square-foot Volkswagen Training Academy.
The Chattanooga Area Chamber of Commerce officials note that Gov. Phil Bredesen worked with Hamilton County Mayor Claude Ramsey, Chattanooga Mayor Ron Littlefield and others to have a $20 million interchange constructed off Interstate 75 into the VW site – even before the company made a final decision.
“The Volkswagen project required a whole new level of cooperation,” says Tom Edd Wilson, chamber president and CEO. “That same spirit of cooperation is aiding our community in meeting Volkswagen’s aggressive timeline for the plant to become operational.”
The chamber also is working with the private sector to establish new industrial infrastructure to attract additional companies, such as automotive suppliers and other companies, particularly those that manufacture larger components such as chassis, interior panels and seats.
Chattanooga State Community College has been identified as the primary training partner, so the chamber’s workforce development staff is assisting the college and VW’s human resources team in prepping for hiring and training.
“Most of that won’t begin until 2010,” says J.Ed. Marston, chamber vice president of marketing and communication, “but we’re working to make sure that the infrastructure to support that and all their needs is well under way in the meantime.”
