Another German automaker is putting down roots in Southeast Tennessee.
Officials for Volkswagen rival Daimler on Wednesday joined Nissan at the ground breaking for a new plant that will create 400 jobs making engines for both companies.
The factory, 60 miles northwest of Chattanooga, will build 4-cylinder engines for new Mercedes-Benz cars as well as Nissan's Infiniti luxury brand starting in 2014.
The 310,000-square-foot plant to go up next to Nissan's existing powertrain factory that already employs 1,100 people.
The factory is the most significant project of the 2010 partnership between the Renault-Nissan alliance and Daimler outside of Europe, said Carla Bailo, Nissan Americas' senior vice president of research and development.
"This location ensures a direct supply of engines for the Mercedes-Benz C Class," she said, citing the sedan that will be built in Daimler's assembly plant in Vance, Ala., about 120 miles south of Decherd.
Felyicia Jerald, communications manager for Mercedes-Benz U.S. International Inc. in Vance, said plans are to start production of the cars in Alabama in 2014.
"We're excited to have the opportunity," she said in a telephone interview. Jerald added there will be synergies and efficiencies with the engine factory only three hours away from the assembly plant.
The new factory in Franklin County will mark the first production of Mercedes-Benz engines in North America.
Meanwhile, for Nissan the plant will secure production for the first time of an in-line, 4-cylinder engine for Infiniti customers, Bailo said.
"What that means is that Infiniti drivers will get the additional option of access to an advanced engine...with the fuel economy not typically associated with a higher performance vehicle," she said.
Mark Swenson, Nissan Americas' vice president of production engineering and component facilities, said the plant brings together Japanese, French and German auto companies to create manufacturing jobs.
"This is ground breaking literally and figuratively," he said. "In terms of high-tech job creation, it really doesn't get much better than this."
Richard Stewart, Franklin County mayor, termed the new engine factory "a huge event."
"There's not many counties in Tennessee that are going to experience what we are," he said. "We have a great international partnership."
The investment in the new plant wasn't immediately announced. Nissan has invested over $682 million in Decherd's operation so far. The new plant will be about 25 percent the size of the existing factory's 1.2 million square feet.
Nissan's Decherd plant started in 1997 and today makes 4-, 6- and 8-cylinder engines for the company's vehicles produced in the U.S., including for its Smyrna, Tenn., assembly plant. The existing engine plant also has crankshaft forging and cylinder block casting operations.
Last year, the plant produced more than 580,000 engines, according to Nissan.
Swenson said plans are to hire locally, though officials wouldn't give a potential pay range for the jobs.
He added that the existing plant is to add another 90 jobs to build the all-electric motor for Nissan's Leaf.
Volkswagen officially opened its $1 billion Chattanooga plant about a year ago. It recently announced plans to add 1,000 workers this year, pushing its headcount to about 3,500 people.
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