Germans? Delay? VW postpones Chattanooga groundbreaking ceremony
When building a new factory, especially one as large and complex as an auto manufacturing plant, there are plenty of elements that can throw things off schedule. Scheduling itself, however, is rarely the problem, especially for a German company. But that's the reason why Volkswagen has delayed the groundbreaking ceremony for its new plant in Chattanooga, Tennessee. According to VW spokespersons, the ceremony is being delayed until March due to several members of the company's management board in Wolfsburg wanting to be present, but can't make it any earlier. (And it's not even Oktoberfest yet!)However, Volkswagen insists that construction of the $1 billion plant is progressing as planned. This also includes the city's preparations for hosting the factory, refurbishing office buildings downtown, the opening of a new school for the German-speaking children of VW employees, stores and restaurants to cater to the workforce, as well as space for the vendors and suppliers who are expected to come to town to support the factory. In the words of the director of the local development organization, "We're so fortunate that, given the economy and that kind of thing, we have robust employers in downtown." Indeed.
[Source: msnbc.com]
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Reader Comments (Page 1 of 2)
Mazda FTW! 11:35AM (1/05/2009)
No wonder some Southern Senators weren't keen on the domestic car-maker bailout.
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Polly Prissy Pants 12:33PM (1/05/2009)
No kidding. The Tennessee government has no problem giving VW $580 million for their new plant but opposed loaning the domestic automakers money because they believe in the free market, or some such nonsense. I guess they were really opposed to any more competition to their new German overlords.
Epyx 1:17PM (1/05/2009)
Wait, there is a big difference between a federal loan to GM and Chrysler and with tax incentives for a company to locate in your state. Alabama/Tennessee/SC all laid out lots of incentive to attract foreign manufacturing in their states. I dont know about SC and Tenn, but I do know Alabama has made back the millions they invested in bringing manufacturing to the state. Hyundai alone invested over a billion in the plant and now employs over 2000 people. All those workers pay taxes, buy stuff, support local business. Basically the exact opposite of what is happening in Michigan.
Epyx 1:44PM (1/05/2009)
Alabama Major Financial Incentives: Capital Investment Tax Credit; Site Preparation Grant Programs; Industrial Revenue Bonds; Alabama Industrial Access Road and Bridge Program; Alabama Economic Development Loan Program; Alabama Infrastructure Grant Program --- all used to GROW THE ECONOMY.
Federal Aid to GM and Chrysler: 12 Billion directly from tax payers to cover business failures and shortcomings to avoid catastrophic job loss and urban decay. ----used to keep the ECONOMY FROM COLLAPSING
See the difference?
Epyx 2:08PM (1/05/2009)
$580 million < 12 Billion.
Hmm, $580 Million invested to grow the economy, add jobs, add tax revenue, facilitate small business (as ancillary to VW) etc.
VS.
12 Billion down a rat hole to keep Chrysler and GM on life support and slow the exact opposite of above.
How is the differences here not not self evident?
jpm100 3:03PM (1/05/2009)
0.58 billion for 2000 jobs vs. 14 billiion for 200,000 jobs.
about $300,000 per job vs $70,000 per job. The US bailout is cheap.
As for all those wonderful Alabama development programs, must be nice when the Fed lavishes a state in federal tax dollars via welfare and pork allowing the state to offer all those nice programs. Especially when its been at the expense of states like the Mid-West which usually see far less than they put into the Federal coffers.
Michigan for an example should make two changes to help the US industry become competitive.
1) Become a right to work state like Alabama
2) Become a Federal Tax money pit like Alabama
Then it could create a comparable environment for the US auto industry.
Epyx 3:11PM (1/05/2009)
Existing jobs vs new jobs. Do you see the difference? Spending 12 billion to maintain the status quo is far different than 570 million to spur growth. One is a band-aid and the other is an investment.
I am not saying the GM/Chrysler loans were not a necessary evil but I am saying they are not in any way similar to incentives used by southern states to attract new business.
tankd0g 4:36PM (1/05/2009)
Wanting to put money in a new plant with guaranteed new jobs rather than a proven loser with no plan. Funny that.
jpm100 5:47PM (1/05/2009)
You realize that you're posting that these are 'guaranteed jobs' under an article where the ground breaking was delayed two months at the last minute.
A ground breaking is a ceremony that doesn't have to carry any real legal, financial or contractual meaning and canceling at the last second probably costs money.
why not the LS2LS7? 11:35AM (1/05/2009)
Sounds like a cover story to me. Is there any shame in admitting you have a cash crunch right now? It's just difficult to find the money for huge capital improvements like this.
I'm sure the project will go forward at some point. I'm not as sure that it will turn out to be a big win for VW.
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Rends 11:47AM (1/05/2009)
guess what.
The VW managment isn´t back from Brasil until Carneval ends ;)
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Roar66 12:18PM (1/05/2009)
Article makes me sick. The hypocrisy of the Southern Senators. This part especially, "This also includes the city's preparations for hosting the factory, refurbishing office buildings downtown, the opening of a new school for the German-speaking children of VW employees." Welcome to Chattanoogaberg home to the German Designed and "American" built VW. Yah dis is Hanz and dis is Franz and were here to pump.....you up.
Jake 12:23PM (1/05/2009)
@Roar66
Read through your meandering and disjointed comment looking for a point. Did not find one.
...article makes me sick... hypocrisy or Southern Senators....city preparing to host factory, opening school for German children... Hand und Franz.. ???
Judy Zik 12:27PM (1/05/2009)
Hmm. What do you think the chances are that VW payed for all those "preparations" the city is making there or is there a small chance that maybe the tax payers did? Any chance any tax incentives were used to get VW to build in a town the German's probably can't even pronounce? Let's face it every automaker has their hands in the tax pot.
Long term this plant will be a huge win for VW and that city. The American Dollar is likey to continue to be weak for a long time to come. It will be much cheaper for VW to build vehicles in the US for the North American market.
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Epyx 1:27PM (1/05/2009)
The difference is this is an investment. Also, not all tax incentives actually cost anything.. For instance, say Tennessee told VW they NEVER have to pay any taxes to the state (not true). This incentive represents a concession of "potential" revenue. Tax revenue that would also be conceded if VW went to Alabama or SC. Other uses of tax dollars DO have actual costs ... such as building roads and schools or expanding rail lines. Despite this cost to tax payers it is an investment in a growing company. That company will then employee state citizens as well as attract others to move to Tenn. The new business will then facilitate the growth of supporting business and possibly attract more large companies. Again, basically the EXACT opposite of what is occurring in Michigan.
Frank 2:50PM (1/05/2009)
(with a Gregory Peck impersonation) Judy, Judy, Judy... you don't understand how this works my dear. When it's a domestic maker building a new plant or expanding an existing one it's ripping off the taxpayers, "Corporatism", "Coprorate Welfare", etc. When it's a foreign based company it's an "investment". Hey, it's all good! See the difference now?
Epyx 2:58PM (1/05/2009)
Frank,
If GM, Ford, or Chrysler were in a position to build a new plant and Alabama wooed them with an aggressive tax package I would also call it an investment.
The difference between a rescue package to maintain existing jobs and industry is much different than funding growth.
dkw 1:21PM (1/05/2009)
"the opening of a new school for the German-speaking children of VW employees"
So many of the jobs at this plant are for non-US citizens that a school is actually needed for the employees that have children who do not speak English??
Well, I'm glad to see that the plant built in Tennessee is employing those who live in Tennessee. (maybe they're from across the border in Frankfort)
(and yes, I'm aware that this will provide jobs to some people, I just found that kind of ironic)
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Epyx 1:31PM (1/05/2009)
Even if EVERY employee at the VW plant is German (not true) the influx 1,000 educated well paid Germans would be a boost to the economy. They would 1000 places to live, they would have 1000 families to feed, 1000 more cable subscribers, 1000 more tax payers, 1000 more restaurant patrons, 1000 more move theater goers, 1000 more mall shoppers, etc. etc. The point is the influx of VW employees combined with local hires equates to the growth of the local economy and tax base. Again, the exact opposite of Michigan
Mazda FTW! 2:26PM (1/05/2009)
Ok so why don't we allow a nice invasion then? So many new people to feed, clothe, educate and give cable tv service to. That should boost the economy right?