VW’s 30-mile supplier zone doesn’t worry Knoxville Chamber

A story in today’s Chattanooga Times Free Press says Volkswagen will encourage all suppliers for its new Chattanooga plant to locate within 30 miles of the soon-to-open factory.

Since Knoxville is about 100 miles from the VW plant, the 30-mile limit would seem to spell
012010volkswagen.02.jpgtrouble for Knoxville-area economic development officials’ effort to recruit VW suppliers.

But Knoxville Chamber officials say they aren’t worried.

“We’re working on a couple of (VW suppliers) right now,” said Rhonda Rice, the chamber’s executive vice president.

The chamber won’t say publicly who the prospects are, but Rice is “optimistic” about chances of at least one of the companies locating in the Knoxville area.

I asked her to rate the chances on a scale of 1 to 10, but she opted for “optimistic.”

As for the 30-mile limit cited by Volkswagen consultant Andreas Geiger in the Times Free Press story, Rice said that won’t hamper recruitment efforts.

It’s her understanding that while VW may want Tier 1 suppliers to be close by, Tier 2 suppliers — “which is what we have a lot of here” — can be in the Knoxville area.

The “Tier” designations are industry terms that identify where a company sits in the supply chain. Tier 1 suppliers typically provide parts specifically for one automaker — VW, Nissan, Ford or whoever.

A Tier 2 supplier usually provides products to one or more Tier 1s.

If VW encourages its suppliers to be within 30 miles of the Chattanooga plant, Knoxville Chamber President Mike Edwards made it clear he hopes Volkswagen doesn’t include businesses in other states that “didn’t put a plugged nickel” into Tennessee’s VW recruitment effort.

Photo: Chattanooga Times Free Press/ Angela Lewis