The ripple effect of the Volkswagen project is illustrated by a $1.7 million expansion planned by Southern Tool Steel, Inc., a Chattanooga-owned distributor of metals and plastics. The project will double the production capacity of the operation and add 25 new jobs within the first year of completion.
STS is a metal supplier to machine shops, tool and die and manufacturing facilities including automotive parts stamping operations, and their tier-one suppliers. Customers include Hyundai, Nissan, Honda, Kia and Toyota. Gestamp, a potential customer for STS, is a tier-one supplier to Volkswagen in Chattanooga. STS can also supply additional Volkswagen suppliers with their metal needs.
Located at 2726 Kanasita Drive in Hixson, STS employs 46 people. The expansion is expected to add as many as 45 employees within three to five years of the completion, according to STS President Arnold Erwin.
“We are very pleased to be expanding from a 35,185-square-foot facility to a 70,910-square-foot plant,” Mr. Erwin said. “This project is a milestone in our 26-year history.”
Local leaders applauded the expansion as a sign of Volkswagen’s positive impact on area businesses.
“This announcement suggests what we have been saying all along – that, thanks in part to the VW plant, Chattanooga is weathering the national economic downturn better than many communities,” said Chattanooga Mayor Ron Littlefield. “The nation is just beginning to see an uptick in positive signs, while we have many signs of a strong economy, including this STS expansion.”
"I am always happy when a company announces that it will be creating new jobs,” said Hamilton County Mayor Claude Ramsey. “I congratulate Southern Tool Steel on this project that strengthens our business community.”
Some of Southern Tool Steel’s automotive customers include Yorozu (Morrison, Tn.), Denso (Maryville, Tn.), Sewon America (LaGrange, Ga.), Topre America (Cullman, Al.), Toyota Motor MFG of Alabama (Huntsville, Al.), and Eagle Bend Manufacturing (Clinton, Tn.).
“This expansion by Southern Tool Steel is a great example of how recruiting major investments like Volkswagen and Alstom is generating opportunities for existing companies to grow and create new jobs,” said Tom Edd Wilson, president and CEO of the Chattanooga Area Chamber of Commerce. “Many small, local companies are also benefitting from the economic activity from these major investments and the thousands of construction and full-time jobs they are creating.”