Tennessee Reviews Clawbacks for VW Tax Incentives After Cheating

The incentives that Tennessee provided to lure the Volkswagen plant were among several large deals that Southern states have offered in recent years to land factories from automakers.

Amy LaLonde, a metal finishing body technician, inspects a 2012 Volkswagen Passat in the body shop at Volkswagen AG's factory in Chattanooga, Tennessee, on June 1, 2011.
Photographer: Mark Elias/Bloomberg

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By Mark Niquette

October 5, 2015 at 9:00 AM UTC

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Tennessee lawmakers will review the state’s investment of hundreds of millions in incentives for Volkswagen AG’s Chattanooga plant and provisions for recouping money if the company’s emissions-cheating scandal threatens jobs.

A Senate panel is scheduling a hearing in coming weeks on the affair’s impact on the 2,400-worker factory, which builds Passats, and an expansion for a new sport-utility vehicle. Lawmakers will review clawback provisions and the method for determining whether companies meet job-creation promises, said Senator Bo Watson, a Republican who chairs the subcommittee.