Gov. Phil Bredesen said Tuesday that he will lead a trade mission to Germany in October to meet with Volkswagen suppliers in an effort to lure their operations to the Chattanooga area to support a new plant the automaker is building there.
The initial Volkswagen investment in Chattanooga, an assembly facility that will cost $1 billion and employ 2,000 workers, is "just the tip of the iceberg," the governor said. He was speaking at the annual Governor's Conference on Economic and Community Development at the Gaylord Opryland Resort & Convention Center.
Bredesen predicted that as Volkswagen's partners move into the area to supply the new plant, they would have "an amazing ripple effect throughout the community."
The plant, expected to open in early 2011, will assemble a new midsize sedan designed specifically for the U.S. market. The vehicle is intended to play a key role in the German automaker's plans to increase its annual U.S. sales to 800,000 vehicles by 2018, up from last year's 240,000.
A recent economic impact study predicted that indirect employment generated by the plant — mostly by suppliers — could create an additional 6,500 jobs in areas around Chattanooga, including southeast Tennessee, north Georgia and northeast Alabama.
Bredesen, along with state Economic and Community Development Commissioner Matt Kisber and other state and local officials, will meet with Volkswagen executives, as well as about 200 companies that do business with the automaker, he said.
"The next two years are going to take some hard work to maximize the benefits" of Volkswagen's decision to locate in Tennessee, Bredesen said.
Initial efforts will be limited to luring suppliers to communities close to the site of the plant, which will be situated on the Enterprise South industrial park 12 miles north of downtown Chattanooga.
During the six-day trip, the group will visit Volkswagen's Wolfsburg headquarters, then meet with about 50 VW partner companies in each of four cities: Berlin, Frankfurt, Dusseldorf and Munich.
Diversification is urgedBredesen told the group, which was packed with local and state economic development officials, as well as representatives from the Tennessee Valley Authority, that while landing the Volkswagen plant was "a proud moment for Tennessee," it's "important not to become too heavily invested" in any one industry. About one-third of the state's economy is now tied to the auto industry.
"We're focusing our (economic development) efforts on a diverse range of projects," the governor said.
He acknowledged that the current national economic downturn is making the state's job-creation efforts more difficult.
"These are challenging times," Bredesen said. "We can't change that."
To help ensure that Tennessee can compete successfully for new jobs and industry, he said, "Education is still our number one priority."
"We have to work hard to make sure we have a work force to take advantage of new opportunities."
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