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Chattanooga: Building VW’s new plant creating nearly 10,000 jobs

By: Mike Pare
(Contact)

Included in this article

William Fox

Nearly 10,000 construction and spinoff jobs will be created in the Chattanooga area over the next couple of years as builders erect Volkswagen’s new auto assembly plant, according to an economic report.

The construction of the $1 billion facility, which officially starts this month, will inject more than $333 million in personal income growth into the region’s economy over the period of time, the University of Tennessee study shows.

Bill Fox, who directs the UT Center for Business and Economic Research, said the jobs figure includes workers who will build the plant as well as spinoffs such as new restaurants and other positions created in the wake of the automaker’s project, the largest manufacturing investment in the city’s history.

“It’s not just people working at the facility,” he said about the Enterprise South industrial park location, where workers plan to pour the first concrete this month.

Roger Tuder, chief executive of Associated General Contractors of East Tennessee, said it has member builders eager and ready to work on the project.

“It has come at a good time with the downturn in the economy,” he said.

Dr. Fox said the number of jobs includes slots at businesses which will supply the 1.9 million-square-foot construction project, such as companies that sell building materials. But, he said, the estimate does not include the raising of any buildings belonging to supplier businesses which will help Volkswagen produce vehicles.

“It was based on the magnitude of the (VW) facility,” Dr. Fox said.

VW officials have said 2,000 assembly jobs will be created once the plant is built. UT reports that after the VW plant is built and in production, an additional 9,477 jobs will exist due to supplier companies and other spinoffs.

OUT FOR BID

VW currently is evaluating bids for the construction work at the plant site, said Mr. Tuder.

Mr. Tuder does not know how many people will be involved in building the facility or how VW will phase in the construction, but he believes the number will be substantial.

Those questions will be answered when VW names one or more general contractors for the facility, he said.

Martha Eaker, president of the Catoosa (Ga.) County Chamber of Commerce, said North Georgia is positioned to take advantage of the construction jobs.

“Historically, about 70 percent of our people go across state and county lines to work,” she said. “A large percentage go to Hamilton County.”

The region also will have the work force needed to fill the construction and assembly slots, citing Northwestern Technical College, Chattanooga State Technical Community College, the University of Tennessee at Chattanooga and Dalton College, Ms. Eaker said.

“We have the educational facilities to train them, to get them ready if they’re not already ready,” she said.

Alison Tyrer, a spokeswoman of the Georgia Department of Economic Development, said VW will try to hire the best qualified people and contractors.

“We hope Georgians will be among those,” she said.

Ms. Tyrer said that at the Kia Motor Co. plant under construction near the Alabama line in West Point, Ga., about 75 percent of employment applications are from Georgians. She said the remainder are from other states, most of those presumably from Alabama.

Dr. Fox said estimates predict that building the VW plant will provide $26.1 million in new state and local sales tax revenues over the next few years.

To come up with its projections, UT estimated the labor and material components and worked in multipliers related to construction spending and income creation, he said.

Volkswagen plans to build a new mid-size sedan aimed at the American market at the plant, which is to start production in late 2010.

According to documents, VW has a plan to start an expansion of the plant in April 2011. The UT study does not include any construction jobs or revenues related to that potential expansion.

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