Four-wheel ignition

BERLIN — While Chattanooga prepares for VW to turn earth for a $1 billion auto plant, Southeast Tennessee officials are scouring the German countryside to entice new suppliers and more jobs.

Dusseldorf, Frankfurt and Munich top the list of cities visited by more than 40 economic developers and officials seeking to multiply the impact of VW’s plant to open in 2011.

“It’s not too early for us to build relationships with suppliers,” said Trevor Hamilton, the Chattanooga Area Chamber of Commerce’s vice president for economic development.

The state of Tennessee invited suppliers to attend “Invest in Tennessee” forums and hear presentations while in Germany last week.

The Tennessee group has visited Dusseldorf, an economic center of Germany on the Rhine River, as well as Frankfurt, the financial and transportation nexus of the country. Officials will end their visit Monday with a trip to Munich, the capital city of Bavaria, north of the Bavarian Alps and the third-largest city in Germany.

In Chattanooga, VW expects to employ about 2,000 people at the Enterprise South industrial park plant. The governor is working to secure as many as 6,000 more automotive supplier jobs within 100 miles of the plant.

He called VW “an absolutely first-class, gold seal company,” but noted that landing the plant is just the first step in turbocharging the regional economy.

“This is a hunting license,” the governor said about the region’s opportunity to attract supplier jobs to Tennessee.

Both Hamilton County Mayor Claude Ramsey and Chattanooga Mayor Ron Littlefield were confident about recruiting suppliers to the area.

“There’s no doubt there will be suppliers locating there,” Mr. Ramsey said. “That’s what we’re here for.”

Gregg Ridley, Bledsoe County mayor, said the overseas mission is all about the jobs.

“We have some leads,” he said. Bledsoe County has a 139,000-square-foot building on 15 acres which once belonged to auto component maker Dura Automotive, but it closed in 2003, he said.

“We’ve got an advantage with the building being there,” Mr. Ridley said.

Auto industry observers often divide a major manufacturer’s supply chain into three tiers. Tier 1 suppliers usually locate next to or close to a plant. Carmakers and tier 1 suppliers are moving from making large batches of identical components to having those parts delivered in sequence to auto manufacturers.

Tier 2 suppliers may service the tier 1 companies, while tier 3 suppliers may provide to tier 2. Therefore, tier 2 and 3 businesses don’t necessarily need to be so close to an assembly plant.

Patrick Phillips, head of the economic development agency of Loudon County, Tenn., about 50 miles northeast of Chattanooga, said there is a significant benefit from landing spin-off jobs.

“The prospects for Loudon County are excellent,” he said. “We’re optimistic given our location and proximity along the interstate.”

W. Andrew Burke of the Regional Alliance for Economic Development for Northeast Tennessee and Southwest Virginia said the area wants to be in the mix for pulling in suppliers, noting that Green County, Tenn., is represented by his group.

“We already have a significant cluster of second- and third-tier automotive suppliers,” he said.

Gov. Bredesen said VW landing in Chattanooga is “a huge Good Housekeeping seal” for the area.

“People will say ‘an automaker can put a plant anywhere they want. VW chose Chattanooga. Maybe we ought to take a fresh look.’”

DESIGNING THE CAR

While Tennesseans and North Georgians seek suppliers, VW designers and engineers work on the new mid-size sedan to be built at Enterprise South. The car is one of the linchpins on which VW is pinning its hopes of securing a much larger share of the American market.

The prototype of the car is being conceived at VW’s tightly secured vehicle design center in Wolfsburg, Germany, dubbed Walhalla, the name of the mythic Norse hall ruled by Odin, leader of the Norse gods.

Walter de Silva, an Italian and VW’s chief designer, called Walhalla “the birthplace of our ideas.”

American automaker General Motors was the first car company to recognize the importance of design in strategy, he said.

“At VW, design is assuming more responsibility,” Mr. de Silva said.

He said VW, known for its iconic Beetle in the United States, can derive inspiration from its past.

“We need to recognize what the DNA is of the brand ... and this is what we need to communicate in the future,” Mr. de Silva said.

While tightlipped about specifics, he said the car will be “a customization of American life,” but at the same time recognizable as a Volkswagen.

Auto analyst Erich Merkle of Crowe, Chizek and Co. said German automakers usually keep new products tightly secret. VW probably will show off the car at the Detroit Auto Show, but not until early 2010, he said.

“I’d pick Detroit because of the vehicle and what it represents,” the analyst said.

Mr. Merkle called Mr. de Silva one of the best auto designers in the world.

“He’s like the Michael Jordan of auto design,” he said. “He comes out with designs which are just striking.”