[August 03, 2008]

The Decatur Daily, Ala., Eric Fleischauer column: VW plant transforms area; we can improve

(The Decatur Daily (AL) (KRT) Via Acquire Media NewsEdge) Aug. 3--The temptation is great to ignore goings on in Chattanooga since it prevailed over Limestone County in its bid for the Volkswagen AG assembly plant, but that would be a mistake.

Unless we understand the value of such an economic development coup, we cannot know how aggressively we should pursue it in the future.

Early indications are that Chattanooga will enjoy enormous benefits.

Originally expected to solely produce Volkswagens, company officials now say they are considering using the site to assemble vehicles for its subsidiary, Audi, as well.

If so, they expect initial annual production to be 200,000 vehicles, rather than the previously estimated 150,000. That would mean more jobs and more capital investment.

Double whammy

It would be a double whammy for Limestone County, which had hoped to have a chance at an assembly plant if Audi chose to build one.

There also are indications many of the top-tier suppliers -- suppliers Alabama was hoping to land even after VW chose Chattanooga -- will co-locate with VW at the Enterprise South site. That still gives Alabama a shot at lower tier suppliers, but wages at such plants typically are at or below North Alabama's median wages.

Volkswagen is showing strength despite high gasoline prices. While its percentage of U.S. sales are low, it beat out Ford in global sales in the first half of 2008.

And while the Decatur area still battles for a Memphis-to-Atlanta highway, the VW announcement has lawmakers talking about the possibility of a high-speed rail link from Chattanooga to Atlanta.

It is too early to know whe-ther Tennessee, with an estimated $400 million incentive package, overpaid for the privilege of an assembly plant. It is not too early, however, to recognize that landing an assembly plant is transformational for a regional economy.

What we can do

What does that mean for North Alabama?

It means we need to make sure we develop excellent interstate access to available industrial sites. The most obvious shortcoming of the Greenbrier site, the one VW was evaluating in Limestone County, was interstate access. VW's decision suggested it was unwilling to gamble on the state improving and widening Greenbrier Road within VW's tight production deadline.

If the state wants future industrial prospects to consider the Greenbrier property, it should continue efforts to improve Greenbrier Road.

Completion of the Tanner interchange on Interstate 65 is even more important, as it serves both the Greenbrier property east of I-65 and the Tennessee Valley Authority Megasite west of I-65.

We need to deal with chronic problems at the debt-ridden Limestone County Sewer and Water Authority. Industry, especially auto assembly plants, need massive amounts of water.

Also important: downtown redevelopment, both in Decatur and Huntsville.

The beauty of all these efforts is that they improve our quality of life, even as they provide opportunities for economic development.

Contact Eric Fleischauer at eric@decaturdaily.com.

To see more of The Decatur Daily, or to subscribe to the newspaper, go to http://www.decaturdaily.com

Copyright (c) 2008, The Decatur Daily, Ala.
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