State officials announced today they’re spending over half-a-billion dollars on the new Volkswagen plant in Chattanooga.
The 577-million dollar incentive package for the German automaker is spread between infrastructure investments, job training and tax breaks.
Economic and Community Development Commissioner Matt Kisber says he’s not at liberty to say if this is the largest package Tennessee has ever offered, since many companies won’t release details of incentives. Regardless, Kisber says there are huge benefits for the state.
“Because this is the biggest project out there in 2008, and the world is seeing that the state of Tennessee, through its business climate, its workforce, that one of the most respected companies in the world decided to plant their flag in the United States, and to stake their U-S strategy on, and I think that’s a pretty bold statement.”
The ripple effect of the investment is estimated to be nearly 12-billion dollars over the next thirty years, by the time the suppliers for the plant are added into the equation.
UT Economist Bill Fox analyzed the numbers for the state. He says annually, the deal will create a dollar of personal income for every dollar the state spends.
“You put up a dollar today you get back a dollar every year. If you think of saving yourself, if you can save a dollar in some investment fund, and you earned a dollar next year and a dollar the year after that, that’d be an extraordinary rate of return.”
Fox estimates the plant and its associated parts suppliers will create over 11,000 jobs. Car assembly is expected to begin sometime in early 2011.
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