NOTE: This is the third in a continuing series of posts from Doug Lawyer, Economic Development director, about his trip to Germany to meet with Volkswagen and its suppliers.

Since my last posting, we have done a bit of traveling over the weekend. Our group took a train from Frankfort to our final stop of Munich. We had some
free time to do a little shopping and support the local economy. A group of us yesterday took an excursion the Dachau Concentration Camp memorial site ­-- amazing and troubling history. It was a very moving experience to see this facility first hand. To lift our spirits, we managed to find a good German beer haus for dinner last night.

Today in Munich was our final Tennessee seminar, by far the most well attended of them all. We had at least 30 suppliers attend our meetings and we were joined today by Fernando Riberoa, who was on the financial side of the VW decision to locate in Chattanooga. It's been interesting to get different perspectives from VW reps each who played a different role in what was called "project polar bear" into how they ultimately decided to come to Tennessee.

Mr. Riberoa told our group and the suppliers in attendance that VW will need to very quickly establish a strong supplier base in the U.S. They want to source 85 percent of their parts from North American suppliers. I believe that the suppliers that made it to our meetings were there to learn as much about VW as we were. All the suppliers were quite impressed that we had the opportunity to meet with such high level folks at VW's world HQ in Wolfsburg. There is certainly business to be had from suppliers coming into the region, although I did meet with some that will feed to VW Chattanooga plant from existing plants; in Alabama and Georgia for example.

Thinking about the Knoxville economy, we have several auto component manufactures that are seeing difficult times, having to slow production, to layoff, or make tough decisions to perhaps close operations. I'm hopeful that our local companies can get a piece of the VW pie. If they are not talking to VW, they should be. VW has recently become the 3rd largest auto company in the world behind Toyota and GM, and they are getting ready to really make an impact on the U.S. market. It was mentioned by VW that the site they have acquired is large enough to accommodate a doubling of their footprint. That is a big deal!

A point that was made during VW's talk today stressed how much quality of life impacts a corporate decision such as this. Schools, hospitals, parks,
and cultural amenities all play a role. VW, after gathering their information on the final three sites, gathered all their top site selection team members and asked them to vote via secret ballot which community they prefer. Ninety-nine percent of the votes came in for Chattanooga. We all should be thanking Mayors Ramsey and Littlefield, Commissioner Kisber and his team at the state, TVA, and the Chattanooga Chamber economic development team for their efforts.

In closing, this has been a tremendous experience. Many relationships were started over here, and I'm confident that good things will come from this trip and VW in general. Tonight, team Innovation Valley begins our next steps strategy over dinner. Tomorrow, we begin our follow up with the suppliers we met over here, and continue to cover this market with the message of the Innovation Valley as a great place to do business.

I've eaten roughly 125 pounds of sausage while in Germany, drank three beers, and I look forward to getting back to Knoxville, seeing my family, and going to Pete's coffee shop in downtown Knoxville for a grilled tuna salad sandwich. I look forward to my 4:30 AM wakeup call for my flight back to Atlanta.

Danka for reading.

NOTE: This is the third in a continuing series of posts from Doug Lawyer, Economic Development director, about his trip to Germany to meet with Volkswagen and its suppliers.

After a 4:45 am wakeup call in Berlin Thursday, we took a train to Dusseldorf, where we had our first Tennessee Forum meetings.

We had approximately 20 suppliers in attendance at this meeting. There was a very interesting presentation by Dr. Herr Speiz, who heads up VW's global production and site selection. Currently, he is responsible for the construction of three new VW plants in­ Russia, India, and Chattanooga.

He went into great detail about what went into their site selection process in the USA. They started by looking at 358 metro areas in the United States, and then began to kick communities out by filter processes including time zone, snowfall, hurricane and tornado activity, airport proximity, and direct flights to their North American HQ in DC area. They ultimately had seven states submit bids for the project, and ended up touring 24sites. Chattanooga submitted in total 2,700 pages of documentation to VW during their courtship of this project.

The Knoxville region never could have made this list, as we don¹t have a 1,100-acre industrial site in our portfolio of available properties, zoned and with infrastructure in place under single ownership. We should, however, have ample opportunity at landing some suppliers and service providers.

The suppliers with whom we met do have real projects, which ranged from bearing manufactures, cockpit (instrument panel assembly), catalytic converters, vibration analysis, and logistics services. Some suppliers will indeed land in a supplier park on the VW site in Chattanooga, but these will be large components that need to be shipped frequently and just in time.

After our Dusseldorf meetings we took a train to Frankfort, where we arrived in the evening. The train was going approx 125 miles per hour. Fuel for cars over here is running $6.63 a gallon.

Friday morning, we had another TN Forum with more suppliers in attendance. Commissioner Kisber has began by giving a TN Briefing, and then today we were joined by Dr. Christopf Spathelf, VW¹s head of Group Manufacturing Overseas (Aktiengeselleschaft). Having senior VW folks at our TN meetings has been critical. It shows that VW is committed to helping TN land as many
suppliers as possible. VW has noted that they have a goal of 80 percent of components being sourced from supplies in North America. These may be existing suppliers already up and running or new to-be-recruited to the region.

I asked Dr. Spathelf how many suppliers it typically takes to make a car, and he responded that it's difficult to tell, but that every car has between 8,000 and 10,000 components. It all comes down to product quality and price. It was exciting to hear that the VW Chattanooga plant will have approx 125 R&D folks. Obviously, R&D is a strength of the Innovation Valley.

We learned more about VWs overall goals in the U.S. marketplace. Currently, VW sells approx 300,000 cars in the U.S. By 2018, they want to be selling 1 million.

From the site selection side of things ­ which relates to recruiting a major OEM (original equipment manufacturer) like VW, or a supplier ­ an interesting point was made by Dr. Spathelf in his talk. He said that "people on the other side of the table are critical to the site selection process, some things can't be expressed by numbers or criteria, its a gut feel.

That is a recurring theme of this trip, which stresses the importance of economic development. It's a relationship business, and we are establishing many relationships over here during this week. Will they translate into projects tomorrow? Maybe. But you cant have the second conversation without the first.

NOTE: This is the third in a continuing series of posts from Doug Lawyer, Economic Development director, about his trip to Germany to meet with Volkswagen and its suppliers.

Today was an amazing day as we toured the Volkswagen world headquarters in Wolfsburg, about an hour train ride outside of Berlin. The scope of this manufacturing campus was unlike anything I have ever seen. 57,000 employees at this campus are producing nearly 3,400 cars a day. We saw being produced the Golf and Tiguon model cars. The original part of this plant was constructed in 1938, and 60 percent of the facility was destroyed during WWII. We actually saw holes in steel beams that were results of bombs and bullets from the war. It is interesting to think that the ammunition perhaps could have been created in Chattanooga on the site that is now being developed for VW's Chattanooga plant. VW currently has 32 plants around the world, and 13 alone in Germany. Their newest plant will be just down the road in Chattanooga.

We were briefed on VW's next generation clean diesel engines, a joint technology developed between VW and Audi. The overall goal here is to increase MPG performance, coupled with lower emissions, something everyone is interested in.

During lunch, we were briefed by VW president of worldwide operations, Dr. Winterkorn. He spoke of their next generation vehicles, which will have heavy focus on electric cars, biofuels, be environmentally responsible, and great looking. This was exciting to hear as the Knoxville region has technology strengths in many of the same areas that are core corporate competencies of VW. Dr. Winterkorn spoke that the new plant in Tennessee is a great example of a strong US-German partnership.

We then toured VW's worldwide design center, and were briefed by the head of auto design for VW. It was clear that VW's design is a combination of passion, heart and gut. The new car, which will be built in Chattanooga, is designed for the American market, but should also have worldwide appeal. When asked how he knew that the auto to be produced in Chattanooga will be successful on a world wide scale, the director of design responded simply by saying that his heart tells him it will be.

I had the chance to ask Governor Bredesen how he would define success of this trade mission. He responded by saying that success will clearly be to land suppliers in Tennessee. He went on to say that today's time with VW was to give all of us direct exposure to VW's corporate philosophies and ethics. He concluded by saying the real work starts tomorrow. Tomorrow is our first Tennessee forum, where we will be interacting directly with suppliers. We are all curious to see how many suppliers attend these meetings and what kind of face time we will get with them.
Tonight we have an opportunity to interact with several VW officials, and this is where the selling of the Innovation Valley gets started.

Food is great, and weather is cool and raining.

NOTE: This is the second in a continuing series of posts from Doug Lawyer, Economic Development director, about his trip to Germany to meet with Volkswagen and its suppliers.

Today was all travel. We left Knoxville at 12:50 pm, had layovers in Atlanta and Paris, and made it to Berlin. We arrived in Berlin at noon local time.

To keep the group awake, we had a three-hour tour of Berlin. We saw remnants of the Berlin wall, Checkpoint Charley and many embassies, including the US Embassy, which is next door to our hotel. The Brandenberg Gate is also right outside of our hotel.

Tomorrow we have an early departure for a train ride to Wolsburg and meetings and tour at VW world headquarters.

Today there was great anticipation for our meetings and tours at VW tomorrow. I was surprised to learn that this trip marks the first time that my economic development counterparts at Chattanooga Chamber have been to Germany.

Our Innovation Valley team is looking forward to getting face time with suppliers over the next few days.

I've not had a chance to speak with Governor Bredesen yet, but he is here.

It's clear by looking around on the streets that the automotive market is different in Europe than in the US. SUVs are a rare sighting, and smaller sedans are much more the norm.

Maybe we will see a prototype of the new VW to be built in TN during our meetings tomorrow.

Note: This release was sent from the East Tennessee Healthcare Center.

A major medical park, East Tennessee Healthcare Center, will break ground on Wednesday, May 7th at 11:00 a.m. The development is on 12 acres located in Dowell Springs Business Park which is off Middlebrook Pike. Mayor Bill Haslam, Mayor Mike Ragsdale and Mike Edwards, CEO of the Knoxville Chamber, will participate in the ceremony.

“We will break ground on two new buildings that will total 175,000 square feet of medical office and clinical facilities with plans for an additional 75,000 square feet of space as demand grows,” said Terry Douglass, CEO of East Tennessee Healthcare Development, LLC. “We have two anchor tenants, Knoxville Comprehensive Breast Center (KCBC) and Tennessee Cancer Specialists (TCS), who together will utilize approximately 70,000 square feet of space initially. Other physician practice groups and clinical facilities have agreed to lease an additional 30,000 square feet of space to date. Construction is scheduled to start in May, 2008. The architect is The Lewis Group and the contractor is Merit Construction.”

“Knoxville Comprehensive Breast Center has outgrown our current location and is looking forward to expanding the facilities for our patients, physicians and staff,” said Dr. Kamilia Kozlowski, CEO and Medical Director. “We are excited to be affiliated with East Tennessee Healthcare Center and that the groundbreaking will coincide with Knoxville Comprehensive Breast Center’s 25th anniversary.”

East Tennessee Healthcare Center will be a world-class medical park that will seek to serve all patients and physicians in East Tennessee and will be centrally located to all area hospitals. Patients will benefit from multi-specialty physician groups on-site and will enjoy easy access, convenient parking, walking paths, waterfalls and beautiful mountain views. The focus will be on wellness, healthy living, and comprehensive diagnostic and therapy solutions to meet many of the healthcare needs of the East Tennessee community.

“To be able to offer all cancer services including clinic, radiation therapy, imaging, clinical trials, and related services in one location makes it convenient for our patients”, said Dr. Tracy Dobbs, CEO of Tennessee Cancer Specialists.

The $35 million healthcare center will provide comprehensive medical and clinical services including a diagnostic imaging center, a clinical laboratory capability, pathology services, chemotherapy and radiation therapy services, a tumor board, an ambulatory surgery center, physical therapy, alternative medicine, medical spa services, research, and clinical trials. Healthcare support services will include a pharmacy, social services, dietician, weight loss center, massage therapy, plastic surgery, acupuncture and dermatology services.

Current businesses located at Dowell Springs Business Park include: Allergy Specialists, Ascendant Lab, East Tennessee Diagnostic Center, East Tennessee Vein Clinic, Endocrinology Consultants of East Tennessee, LifeCare Partners, Thompson Cancer Survival Center and Weisgarber Eye Center.

For more information, contact Terry Douglass at East Tennessee Healthcare Development at 865-691-8098 or by e-mail at terry@provisionfoundation.org.