Senator Bob Corker on Wednesday said a University of Tennessee Center for Business and Economic Research (CBER) study on the impact the expansion of Volkswagen Chattanooga’s manufacturing facility will have on the economy in Tennessee shows the development is paying off for Chattanooga.
According to the study, the expansion could add 9,800 full-time jobs to the Tennessee economy, generate $373 million in additional annual income and increase state and local tax revenue by $35.1 million annually once the plant is fully operational.
Senator Corker said, “Today’s announcement that nearly 10,000 jobs will be created as a result of Volkswagen’s expansion is great news for Tennesseans.
“Every step along the way, we have worked hand in hand with Volkswagen leadership in Germany and our state officials to ensure that Chattanooga would be selected as the location to produce the midsize SUV and Tennessee would become home to the first of its kind research and development facility in the South, and I am thrilled to see that the collective efforts of so many are paying off in a huge way.”
He noted that as mayor of Chattanooga from 2001-2005, he worked with officials and community leaders to develop the 1,200-acre Enterprise South Industrial Park, which is now home to Volkswagen's North American manufacturing headquarters.
He said much of the negotiation that led to Volkswagen choosing Chattanooga occurred around the dining room table of his Riverview home.
David Geanacopoulos, executive vice president for public affairs and general counsel, Volkswagen Group of America, Inc., said, “The findings in the CBER study demonstrate that the incentive package recently passed by the Tennessee legislature will result in an economic growth multiplier of several times the state’s investment.
“We would like to thank Governor Bill Haslam and Economic and Community Development Commissioner Randy Boyd for their leadership in fostering a business environment within Tennessee that is mutually-beneficial for the state and local economy as well as for companies like Volkswagen that have operations in the state.”
In addition to the 2,400 Tennessee workers directly employed by Volkswagen, the study projects that Volkswagen’s $704 million investment in the Chattanooga plant expansion, including the opening of a new North American Engineering and Planning Center, has the potential to:
- Generate $217 million of new income and more than 5,300 indirect and direct jobs in Tennessee during the construction and tooling phase
- Create roughly 9,800 jobs, once the plant is fully operational, including 1,800 potential jobs at the production plant, 200 engineering jobs at the VW North American Engineering and Planning Center, as well as positions at auto parts suppliers, and other jobs throughout Tennessee
- Be responsible for $370 million in additional annual income, once the plant is fully operational
“Extensive supplier linkages and good incomes earned by Volkswagen employees account for the significant employment gains and economic multiplier effects in Tennessee,” said William Fox, the study’s author and director of the Center for Business & Economic Research at the University of Tennessee. “This includes jobs in many industries across the state, such as grocery stores, restaurants, shopping malls and construction.”
Construction for the Volkswagen Chattanooga expansion project is currently underway, and is expected to be completed during the summer of 2016. Production of the Volkswagen midsize-SUV is scheduled to commence at the end of 2016, marking the second Volkswagen model to be produced in Chattanooga, in addition to the Passat.
“The study underscores Volkswagen’s commitment to Tennessee, and we are excited to grow our team and the Chattanooga plant as we gear up for the production of our first-ever seven-passenger SUV for the U.S. market,” said Christian Koch, president and CEO, Volkswagen Chattanooga. “We appreciate our partnerships with Hamilton County Mayor Coppinger and Chattanooga Mayor Berke, as well as Governor Haslam, for their ongoing support of Volkswagen’s expansion in Chattanooga.”
The CBER study is commissioned by Volkswagen Group of America. Findings within the study are independent calculations by CBER researchers.
A full copy of the new study is available here: http://cber.haslam.utk.edu/pubs/bfox309.pdf.