Kevin Krause: "Your City Is Going To Change Greatly"
posted January 8, 2009
A top expert on Germans and the automotive industry said Thursday the $1 billion Volkswagen plant should bring not only 2,000 jobs at the facility, but also 14,000-16,000 jobs at supplier firms and another 10,000 jobs to service the suppliers.
"Your city is going to change greatly because Volkswagen is coming," Kevin Krause, an executive recruiter from Atlanta, said at a breakfast meeting of the Downtown Chamber of Commerce.
At the same time, the City Council on Thursday approved a $45,415,000 bond issue that includes about $11 million to build a new fire station near the VW plant, as well as extend the road to the plant from the new I-75 interchange near Ooltewah.
And, top Volkswagen officials are due in town next week. There is to be a presentation at the Chattanoogan hotel on Monday morning giving a 3D display of what the plant will look like, officials said.
Mr. Krause said Volkswagen will want the suppliers close by so they will be setting up shop in Chattanooga. He said about 80 percent of those will likely be German firms.
He said, "You are going to be seeing 3,000-4,000 Germans and Swiss in your community."
Mr. Krause said he has been in talks with 28 suppliers who are making plans to move here along with the VW facility.
He said he is in discussions with logistic companies and others, who are talking about how many employees they are going to need to place in Chattanooga.
He said Volkswagen will not be looking to hire former "Detroit" employees. He said VW will be seeking "highly skilled craftsmen."
He said some of the jobs at the plant may go to local residents, but many of the workers will be moving to Chattanooga.
The speaker said that will set up opportunities for people in the real estate business and many other professions.
He said the BMW plant in Greenville, S.C., helped turn that city around, and he said Volkswagen is five times bigger than BMW. He said Volkswagen is down about 20 percent, but other automakers are off 40-50 percent. "It's a great brand," he said.
He said BMW brought 23,000 jobs to Greenville, pays $1.2 million in wages and salaries, and has an $8.5 billion annual effect on the economy there. He said those figures should be matched or eclipsed by VW in Chattanooga.
He said that in 1992 Greenville had 12 downtown restaurants, and now it has 70.
Mr. Krause, who lived in Germany for 14 years and still has a home there, said, "I probably know more about Germans from an automotive perspective than anybody else in the United States."
He said the Germans are shrewd business people who thoroughly study an issue before making a decision. He said they value being well-dressed and punctual.
Mr. Krause said he was contacted by a U.S. firm that was in fear of losing its business with a German company. He said he asked to attend a board meeting. He said the Germans showed up ahead of time, well dressed and with numerous satchels of information. He said the Americans came in 10 minutes late wearing Polo shirts and with little preparation. He said he immediately postponed the meeting until the next day, then told the Americans what changes they needed to make. He said they adjusted and are now in good stead with the Germans.
Mr. Krause said Germans like specialty groceries and shops and likely will not be frequenting large chain groceries. He said they also wanted continued German education for their children. He advised that local schools should strive to have an international certificate program.
On the city bond issue, City Finance Director Daisy Madison said the city got a remarkably low interest rate of 3.81 percent. She said there were 11 bidders, and the low bid was by Morgan Keegan.
She said the bonds have already been sold to investors.
It is a tax-exempt bond issue so items at the Volkswagen plant site itself could not be included.
She said the city is looking to go again to the bond market to cover its $20 million portion of the VW project, and that will be a taxable bond issue.
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