San Francisco, CA -- (SBWIRE) -- 07/02/2013 -- A new study released on Tuesday suggests that the Volkswagen assembly plant built in Chattanooga, Tennessee has had a better economic impact than expected. The study, which was conducted by the University of Tennessee, shows that in most respects the $1 billion project has beaten expectations made in 2008 when it was announced. This is in spite of a recent layoff of 500 temporary workers.
The study estimates that the plant has generated over 12,400 direct and indirect jobs as of the end of 2012. Estimates in 2008 were 11,477, for a gain of about 1,000 jobs. As an incentive to attract the carmaker’s facility to the area, state and local governments offered the company about $577.4 million in tax breaks five years ago. The study estimates the Volkswagen assembly plant generates income of $643.1 million annually. Estimates in 2008 were for $511 million annually, for a gain of about $132 million. However, yearly state and local tax revenues have come up a bit short at $53.5 million a year. In 2008, estimates were for $55 million a year – a loss of $1.5 million.
Dr. William Fox, director of the UT Center for Business and Economic Research, compiled the report for the Chattanooga Chamber of Commerce. He explained that factories such as the Volkswagen assembly plant have "multiplier" effects and large economic spin-offs, since much of their business is done with suppliers. "This is a facility that just keeps on giving," Dr Fox continued, "These are annual impacts and will continue year after year."
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