Posted on 07/15/2008 2:09:15 PM PDT by traumer
German carmaker Volkswagen (VW) has chosen to locate its new US car plant in Tennessee, a move that could pump $1bn (£498m) into the local economy.
VW opted for a site in the city of Chattanooga in preference to possible locations in Alabama and Michigan.
The euro's rise against the dollar has made it costly to make cars in Europe and export them to the US, leading VW to explore manufacturing again there.
The move is good news for a US car industry shedding thousands of jobs.
New car
Earlier on Tuesday, GM said it planned to make further cutbacks forced upon it by declining sales in its home market.
VW's decision, however, is disappointing news for Michigan - the home of the US car industry - which it suffering bitterly from the job cuts at GM and close rival Ford. This project will have a significant impact on the economy of Tennessee and the region for decades to come Phil Bredesen Tennessee Governor
When it is up and running in 2011, the new plant will employ 2,000 people directly as well as offering business to hundreds of suppliers.
The new facility will eventually have an annual capacity of 150,000 vehicles and will be used to build a new midsized vehicle for the US market.
VW said its decision was based on a range of factors including financial incentives offered by the state linked to job creation, investment and training.
"This is a significant step forward in achieving our goals in the US market and a clear sign of VW's commitment to the North American consumer," Stefan Jacoby, president of Volkswagen's North American business, said of the project.
Economic impact
VW closed its last US plant, in Pennsylvania, in 1988.
Exchange rate movements in the past two years have made European carmakers look for cheaper production solutions, with VW also building plants in India and Russia.
On Tuesday, the euro hit a fresh high again against the dollar.
State officials welcomed the VW investment, claiming that it put Tennessee on course to eventually become the main site for US car production.
"This project will have a significant impact on the economy of Tennessee and the region for decades to come," said Tennessee Governor Phil Bredesen.
I can’t imagine why they rejected Michigan.
Too much like Europe?
... third world country w. LOW-LOW wages !
It’s this infernal insourcing. How do we stop it?
An acquaintance of mine that is trying to move his business to the east TN area was telling me that in his research and talking to people in the area he is finding out that Chattanooga seems to have a pretty good PR campaign for attracting business. Problem has been that when the companies start doing research about moving in to the area they are finding that the people aren’t educated well enough to fill all the positions necessary. So the businesses look elsewhere.
I thought VW learned a bitter lesson when they were forced to close the NY plant.
As the UAW has proven, you don’t have to be well educated to build cars.
Now, to build cars properly, you have to have a sense of pride-in-workmanship, and there’s a lot of that in the South.
“...I can’t imagine why they rejected Michigan...”
When one actually wants to produce things of value, one tends to insure maximum distance from liberals.
You are right about companies wanting to relocate to areas with well educated citizens. Add to that, Tennessee is a right to work state. The UAW has tried to get a toehold by forcing company wide votes at the existing car plants in Tennessee, but has come up well short each time.
What kind of business does your friend have? I’d love to know what kind of positions can’t be filled.....
This wasn’t his business that he couldn’t find people for. Unfortunately I don’t recall what company it was that he was telling me about.
Thank you. I was about to respond....while I married and moved, I still have a home in Chattanooga and my children live there. I loved raising my family there, miss it like, well you know.
Anyway, what other city of its size has a ballet, opera and symphony. (I live in Greensboro now, a much larger metropolitan area and it has none of those three of its own, sharing all with Raleigh.) A whole raft of professional and no-so-professional live theatres. Colleges/universities in the double digits.
Water and electricity are plentiful and inexpensive. Housing costs are low and the area is chock full of recreational choices. Need a dose of big city...Atlanta is an hour and a half away. Or if you prefer country music, its a couple of hours to Nashville.
Beautiful countryside, with a rivers and mountains, waterfalls and state parks within a very short distance. Do you like to hike, white water rafting, caving???? Chattanooga can offer those things to you with a short drive, some actually within the city limits. The climate is very temperate....the city and the surrounding area being shielded by the mountains from the most intemperate weather extremes.
To add to your list, there are three nuclear power plants in the area....a lot of stupid people in those locations....not to mention DuPont....others I forget.
Thank you. I was about to respond....while I married and moved, I still have a home in Chattanooga and my children live there. I loved raising my family there, miss it like, well you know.
Anyway, what other city of its size has a ballet, opera and symphony. (I live in Greensboro now, a much larger metropolitan area and it has none of those three of its own, sharing all with Raleigh.) A whole raft of professional and no-so-professional live theatres. Colleges/universities in the double digits.
Water and electricity are plentiful and inexpensive. Housing costs are low and the area is chock full of recreational choices. Need a dose of big city...Atlanta is an hour and a half away. Or if you prefer country music, its a couple of hours to Nashville.
Beautiful countryside, with a rivers and mountains, waterfalls and state parks within a very short distance. Do you like to hike, white water rafting, caving???? Chattanooga can offer those things to you with a short drive, some actually within the city limits. The climate is very temperate....the city and the surrounding area being shielded by the mountains from the most intemperate weather extremes.
To add to your list, there are three nuclear power plants in the area....a lot of stupid people in those locations....not to mention DuPont....others I forget.
Thank you!!
And I believe Toyota is in TN too... or is it KY ?
Tennessee ping!
Nice “get” for the Volunteer state!
The “Volunteer Wagaon,” cool.
Kind of like the BMW “Bubba’s Moonshine Vehicle,” plant they built down heah in South Cakalaki.
Meant,”Bubba’s Moonshine Wagon.”
My first trip to TN was in the early 70s to visit Dixie Gun Works. Since then I’ve visited a few times, mostly in the Oak Ridge area. Beautiful state.
Tundra engine plant in Alabama.
Go Gators!
Go VOLS!
GO TIGERS!
SEC ROCKS!!! (Except for Vanderbilt Commode Door Tea Sippers.)
Congrats to Chattanooga, an underrated city if ever there was one.
Go 'Nooga, Go!
I kind-of thought that this would be their choice. TVA had already built a new major substation to the east of Chattanooga earlier this year, and the city has been doing all kinds of work at Enterprise South industrial park. Also, there's a new interchange under construction on I-75 that will feed directly into the industrial park.
Why anyone would choose such overrated places as Nawth Carolina (now New Jersey south) or Flori-duh is beyond me. Thankfully, not enough outsiders have discovered the Volunteer state, so it will maintain its identity.
I believe that the new Toyota plant is outside of Tupelo, Mississippi. For those not familiar with that area, it is an hour south of Memphis, near threebelow.:)
I remember the Japanese were doing this in the 1980’s.
A book described this practice building ‘screw-driver assembly plants' here in America. The book was called MERCHANTS OF INFLUENCE.
It came out in 1991~
Chattanooga... *gnashes teeth*
For those who think the South can’t compete in high tech manufacturing — keep in mind, much of the complex work on the Saturn/Apollo program which put man on the moon — was done in the South....in the 60’s & 70’s!
IBM successfully built the Instrument Unit (IU) in Huntsville, AL.... The IU was the on board computer, navigation and systems monitoring & control system. It was VERY complex and crucial to mission success.
Many of the skilled trades people were hired out of Northern Alabama and Southern Tennessee.
And, — they’ve come a long way since then...
I spent a decade in Huntsville - and then moved to a similar manufacturing environment in Kalifornicate..
If I could have — I would have brought my “red necks” with me......
In all regards - they were a far superior, more trustworthy and reliable team.
As an Engineering Project Manager admitted - he was SHOCKED at the quality of the Huntsville workforce and the quickness with which they adapted to new technology, quick study trainees, hard working with deep pride and concern with doing a good job, willingness to jump from job to job and their disdain for UNIONS.
The Volkswagen was at one time offered as reparations(booty) to the conquering allies who rejected it ! ?
Yes, it's a beautiful state, but we've got a sky-high sales tax (nearly 10%) which applies to everything, a Halls tax (a de facto income tax), a byzantine political climate that is closer to New Jersey in style, suburban sprawl galore in Middle TN, and we're up to our necks in illegals (and there are tons of outsiders).
Why was material for NASA made for in states in The South ? One of the answers is pork barrel spendinging. That has been the story of the Space Program since day one.
Let's put the tax issue in perspective. I spent 1.5 years in Ohio, and in that time, paid at least $5000 more in local and state taxes than I did in the Chattanooga area.
First, Ohio has a state income tax of over 5% for those earning over $40,000 (it's a gratuated rate). Second, most cities in Ohio have a city income tax, many of which are set at 2.5%. Third, my property tax was almost 3X as high in Ohio as it was in Tennessee. And finally, all of Ohio's counties have a sales tax, ranging from 6% in 2 counties to 7.75% in Cuyahoga County where Cleveland resides. All that and they still can't keep the roads in good shape.
There's a story about VW's decision Volkswagen to build plant in Chattanooga
Interesting article Smyrna: Nissan plant's impact on community 'significant', regarding Nissan's impact on Smyrna, TN.
Chattanooga has arrived late in my sales career. I’ve been about the south but never this far east. I could live there quite easily and would probably throttle back.
Congrats to Tennessee from the Caipira!
Shhhhh. We don’t need those smart nor’easterners moving down here.
Well, guess Michigan will need to raise taxes on any remaining businesses to keep the welfare bums happy and voting.
I’d say Nissan has had an impact on Smyrna. It used to be not much more than a crossroads outside of Nashville. Now it is a thriving small city.
I don’t know where you got that info on Alabama but it’s wrong. Alabama had a VERY good chance to get the VW plant. Alabama already is making Mercedes Benz, Honda, Toyota and Hyundai automobiles. Kia is now manufacturing at West Point, Georgia, on the border with Alabama.
I’m glad Tennessee got it, but Alabama is very much in the running when any large manufacturer is looking for a US location.
I don’t know where you got that info on Alabama but it’s wrong. Alabama had a VERY good chance to get the VW plant. Alabama already is making Mercedes Benz, Honda, Toyota and Hyundai automobiles. Kia is now manufacturing at West Point, Georgia, on the border with Alabama.
I’m glad Tennessee got it, but Alabama is very much in the running when any large manufacturer is looking for a US location.
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