The end of the quest for a major auto manufacturer, however, is only the beginning of a future which will include much more than the creation of an estimated 2,000 jobs with Volkswagen. It may also bring an estimated 14,000 more jobs as suppliers locate their production, warehouse, and distribution facilities nearby. The magnitude of the economic impact which will be felt throughout the region is difficult to fully grasp as plans are well underway for the construction of the assembly plant on a 1,350-acre tract at Enterprise South with the company’s first mid-size sedan, created especially for the U.S. market, expected to roll off the line sometime in 2011.
While the efforts of many local and state officials were vital in the campaign to bring Volkswagen to the Chattanooga area, perhaps one of the most gratifying results of the cooperative effort is the validation of the method and the mission of the Chattanooga Area Chamber of Commerce, which, from the beginning, played a key role. Along with Tennessee Governor Phil Bredesen (D), who was a tireless advocate; Senator Bob Corker (R), a former mayor of Chattanooga and finance commissioner for the state of Tennessee; Senator Lamar Alexander (R); Chattanooga Mayor Ron Littlefield; Hamilton County Mayor Claude Ramsey; Tennessee Third District Congressman Zach Wamp (R); Tennessee Commissioner of Economic and Community Development Matt Kisber; and many others, Chamber President and CEO Tom Edd Wilson, Vice President of Public Policy Hayes Ledford, Vice President of Marketing J.Ed. Marston, and Vice President of Economic Development Trevor Hamilton shouldered heavy responsibilities during the discussions with Volkswagen.
“We set up a team here actually with four of us internally,” explains Wilson, “including Trevor, J.Ed., Hayes, and me, along with the two mayors as external members. Trevor was the project manager, and the person in that role is the guy that interfaces with the client and represents the city and county as landowners, leading our team in terms of negotiations. He did a great job. We would meet almost daily for weeks and weeks, and we would leave with assignments to be reported on the next day. Every member of that team pitched in, and I dare say, that if you took one member out the process would not have had the same result.”
Stefan Jacoby, President of Volkswagen America, told the gathering at the Hunter Museum that the city is “compatible with the heritage and values of Volkswagen.” He continued, “As we look out across those spectacular mountains and that river and enjoy the warm welcome of the people of Tennessee, the intangibles are suddenly very tangible. This is America at its best.”
Those intangibles were strengthened by an incentive package for the benefit of Volkswagen which includes land valued at approximately $81 million, road and rail connections and upgrades of nearly $50 million, $200 million in job tax credits, and property tax breaks which could soar to $350 million during the next three decades. In return, the annual estimated payroll for Volkswagen and related businesses is in excess of $600 million. Tentatively, Volkswagen plans to build more than 150,000 automobiles annually at Enterprise South, while its focus is a substantial expansion of the company’s two-percent market share in the United States.
According to Congressman Wamp, the Chamber deserves great credit for the success with Volkswagen, providing ample evidence of a comprehensive refocusing of the organization’s role in the life of the community, which began several years ago and included two vitally important public-private fundraising campaigns to spearhead economic development, “Tell the World” and “Chattanooga Can Do!” Together, these campaigns raised more than $18 million. “Trevor Hamilton and the people at the Chamber briefed us regularly and kept us informed,” comments Wamp. “He deserves tremendous credit. It was ‘never give up’ and ‘leave no stone unturned.’”
Wilson remembers the beginning of a change at the Chamber and appreciates the heavy lifting which was necessary to coordinate the tremendous effort which led the local economic development revitalization. “I think if you went back and truly analyzed it, a lot of things started with a visioning process,” he remembers. “Looking at our little company’s role here back in 2002 when I came in, we began with a new business plan and redefined our role in terms of promoting the economy, redid our mission statement, realigned our talent base internally, and raised money from the private sector, which we had not done previously. This gave the private sector a buy-in to economic development and implemented the strategy and the role that we played in getting our spokespeople out to the rest of the country. They brought site selectors and industry writers to Chattanooga and promoted the area. All of this was part of a cultural change, and cultural changes don’t take place overnight.”
Mayor Littlefield remembers traveling with Hamilton and Ramsey to the Automotive News World Congress in Detroit last winter and credits Trevor with making an initial contact directly with VW’s Jacoby. It seems that being in the right place at the right time -- combined with some early preparation -- may have paid a huge dividend.
“It was fortunate that we went to the show,” Littlefield says. “We had just missed getting the Toyota plant, and there was a low buzz about Volkswagen locating an assembly plant in this country. New auto plants are becoming few and far between, and when Trevor had the opportunity, he put a package of information about Chattanooga directly into Jacoby’s hands. Trevor worked tirelessly and kept us informed. I don’t know if he has slept or eaten since Christmas. He and J.Ed. Marston were responsible for getting pages and pages of information together during the process, and Tom Edd [Wilson] was always the captain of the ship.”
Although Chattanooga has long been known as a model city in terms of cooperation between the public and private sectors, another aspect of the Volkswagen story which shone brightly was the bipartisan effort on the part of elected officials, which provided an outstanding example of what can be accomplished in a cooperative atmosphere. Mayor Ramsey asserted that he witnessed a number of people “park their egos” to work together. The sense of accomplishment he feels was well illustrated when city, county, and private sector workers came together to clear the VW site at Enterprise South during a period of 30-40 days. Everyone, it seemed, simply took pride in benefiting their community. The Chamber, he believes, was instrumental in fostering that sense of unity.
“The Chamber did the hard blocking and tackling to keep the plan in place and keep it moving,” Ramsey comments. “There were huge amounts of detail work, and the Chamber took the lead role in making sure loose ends were tied up and questions were answered in a timely manner. Trevor was the lead on it, and he doesn’t get enough credit in my opinion. He was the guy who was there every day, late into the night and early in the morning, making sure details got done and deadlines were fulfilled on a timely basis. The Chamber has really been on track, and during the last three or four years I have seen them work just as hard on projects we didn’t get. Most people don’t realize the amount of time and effort it takes to make such a project successful.”
Hamilton, Marston, and others at the Chamber did assemble more than 3,000 pages of documents which were requested during the Volkswagen decision-making process. Actually, the first contact regarding VW and Chattanooga came through the state of Tennessee, and the prospective Enterprise South manufacturer was unnamed. Chamber personnel were answering questions for Volkswagen without knowing it and simultaneously following up on that “low buzz” which was known to be the German automotive giant. At the same time, Jacoby was scheduled to speak in Detroit.
“As recruiters do, you have packets of materials in hand with you,” Hamilton relates. “I had the opportunity to meet Jacoby for the first time in Detroit and introduced Chattanooga to him. Little did we know what was already happening. The other concurrent path was still unfolding as well. Then from March forward, we began an intensive period of hosting visits to our community, handling additional requests for information, and forming the nucleus of that group which began working quite literally every day on Volkswagen.”
While a tremendous amount of work has already been done, and it is right and good to savor the fruits of long labor, much remains to be done. Other related companies will be looking at the Chattanooga area for sites as well. Workforce training is already gaining momentum. Volkswagen has been inundated with inquiries from potential employees. Meanwhile, the ripple effect on the local economy is just beginning to be felt.
“I think the Volkswagen decision is going to be so meaningful that it is almost impossible to measure,” comments Wilson.”It will redefine our economy for the next 25 years, and it is truly one of those moments that takes an entire city to the next level in one major leap.”
Certainly, a community which is reaching the next level is doing so in part because its Chamber of Commerce has done so as well. As Wilson recently told his staff, no organization in the Chattanooga area will be more profoundly affected in the days ahead than the Chamber itself. Now the work really begins.