A French company on Thursday became the second automotive supplier in two days to unveil plans for a new factory in the area as Chattanooga officials await word on a Volkswagen plant expansion.
Plastic Omnium Auto Exteriors LLC said it will invest $65 million to build a plant at Chattanooga’s Enterprise South industrial park and create up to 300 jobs.
On Wednesday, Audia International said it will build a $50 million factory outside LaFayette, Ga. An official said it will employ 200 people and would like to service the German automaker.
Chattanooga is seen as the front-runner to land a second production line at the VW plant and assemble a sport utility vehicle in addition to the Passat sedan. The state has offered nearly $300 million in financial incentives if VW puts 1,350 jobs in Chattanooga, and officials expect an announcement by VW soon.
A second line could help attract more auto suppliers to the Chattanooga area to provide the myriad parts needed to assemble the vehicles. Having suppliers nearby cuts down on shipping costs and helps keep assembly lines stocked.
“You’ve seen it happen in the Southeast [near the BMW plant] in Greenville-Spartanburg, S.C., and in West Point, Ga., with Kia,” said Patty Rasmussen, a senior writer for Site Selection magazine.
Marc Cornet, president of the Americas for Plastic Omnium, said the company will purchase about 27 acres at Enterprise South near the VW factory for a facility to perform painting and assembly of auto exterior components such as bumpers and fenders.
“Chattanooga is an ideal location for Plastic Omnium to serve the automotive industry in the Southeast,” he said.
A principal supplier for VW and other major auto manufacturers, Plastic Omnium will create 184 new jobs by the time it starts production in 2015 and will expand its payroll to 300 people within three years.
VW officials have said the automaker wants its new midsize SUV in dealer showrooms in 2016.
Charles Wood, the Chattanooga Area Chamber of Commerce’s vice president of economic development, said landing Plastic Omnium is an indicator the city is living up to a growing reputation as “the center of the automotive South.”
“We’re leveraging our proximity to automotive assemblers across the Southeast along with our outstanding workforce and infrastructure to serve as a platform for automotive suppliers,” Wood said.
Paul Parker, the county’s real property manager, said Plastic Omnium will locate off Hickory Valley Road near ADM’s facility.
Parker said the plant site is part of about 80 acres officials are marketing. That’s all that remains of the 7,000 acres that made up the former Volunteer Army Ammunition Plant when city and county officials bought the property for business users and park space.
Initially, all of Plastic Omnium’s products will be for production at VW. But the company plans to extend its reach to Ford, General Motors, Honda, Mercedes, Nissan and Toyota.
Tennessee Gov. Bill Haslam said in a statement that companies can choose to do business anywhere in the world, and that “when they select Tennessee, it speaks volumes to our business-friendly environment and our workforce.”