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UAW Withdraws Appeal of VW Chattanooga Plant Vote

Major setback for union’s Southern organizing drive.

by on Apr.22, 2014

UAW President Bob King.

The United Auto Workers Union has withdrawn its objections to the results of the in February’s representation election at the Volkswagen plant in Chattanooga, Tenn.

The union had narrowly lost a vote it fully expected to win and blamed the defeat on political interference by Republicans in Tennessee.  Over the years, the UAW has lost a series of representation elections in the Southern United States, where  aversion to unions is strong, so the defeat in Chattanooga came as a major setback to its so far unsuccessful bid to organize foreign-owned, so-called transplant, assembly lines.

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The union decision to withdraw  its protest to the National Labor Relations Board opens the door  for the UAW to call for another election at the Chattanooga plant early next year. The union made it plain in its statement that it will continue its campaign to bring VW workers in Chattanooga into the UAW.


Workers to Decide on Union at VW Plant

Move could be breakthrough for UAW's efforts to organize "transplants."

by on Feb.03, 2014

UAW President Bob King has secured a vote at VW's Chattanooga, Tenn. plant to establish a works council.

In a potentially groundbreaking development that could determine the long-term viability of the United Auto Workers Union, workers at the Volkswagen plant in Chattanooga, Tenn. will vote this month on whether to let the union represent them.

Virtually every major “import” now operates at least one U.S. assembly plant – some today producing the vast majority of the vehicles they sell in this country at these “transplant” factories. So far, the UAW has failed to gain a foothold as makers like Toyota, Honda, Nissan and Mercedes-Benz have actively resisted organizing drives.

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That has led to a sharp decline in the union’s membership and severely weakened its financial base, leading some analysts to warn that unless the UAW can crack into some of the transplants its future could be in danger. (more…)

VW Facing Serious Challenges Even as Sales Soar

Maker rolls out 100,000th Passat from Chattanooga plant.

by on Jun.01, 2012

A VW Passat body under inspection at the maker's Chattanooga plant. Quality will be critical to meeting VW's ambitious growth target.

Half empty or half full?  When it comes to Volkswagen, Jonathan Browning is looking at the glass from both angles.

By most measures, it’s been a particularly good week for the German maker.  With sales for last month up 28.4%, VW is today reporting its best May since 1973.  That news comes less than a day after the 100,000th new Passat rolled off the Volkswagen assembly plant in Chattanooga, Tennessee.

There are plenty of other reasons to be in a positive frame of mind, starting with the growing number of potential buyers who are now aware of products like the Passat, as well as the newly updated Beetle, the recently redesigned Jetta and the expanding line-up of Volkswagen diesels.

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Nonetheless, the British-born Browning, CEO of the Volkswagen Group of America – which includes Audi and Bentley, as well as the VW brand – also sees quite a few reasons to worry whether the maker is operating “at a level that will support our growth.”


VW Announces Major New China Investment

Maker’s announcement will spread impact of auto manufacturing to Western China.

by on Apr.23, 2012

VW already has an established manufacturing base in first-tier Pacific Coast Chinese cities, such as Shanghai.

It’s a huge week for the Chinese auto industry with most of the headlines emerging from the biennial Beijing Motor Show – but at least one major story is coming from halfway around the world.

During a meeting at corporate headquarters in Wolfsburg, Germany, Volkswagen AG officials revealed to Chinese Premier Wen Jiabao and German Chancellor Dr. Angela Merkel plans for a major expansion in the automaker’s long-running partnership with China First Automobile Group.  That includes a new plant in Urumqi, capital of the western province of Xinjiang.

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That in itself is significant, supporting Chinese government efforts to spread the country’s economic boom and — in turn — create new markets for automakers like VW.

“A 30-year success story unites Volkswagen and China,” Volkswagen AG CEO Dr. Martin Winterkorn told the visiting officials. “As a pioneer of the Chinese automotive industry we gave important momentum to China’s industrial development and to German-Sino economic relations. Together with our partners we will now carry this pioneering spirit into Western China as well.”


VW Adding Another 800 Jobs in Chattanooga

Maker struggling to meet booming demand.

by on Mar.22, 2012

Workers assemble a 2012 VW Passat at the maker's assembly plant in Chattanooga.

Volkswagen will create another 800 jobs at its new assembly plant in Chattanooga, Tennessee as it pushes to meet soaring demand. That comes on top of previous plans that will now bring a total of 1,000 new workers to the factory that opened only last year.

The Chattanooga plant is the first the German maker has operated in the U.S. in a quarter century and is a critical part of the maker’s commitment to boost sales to record levels by 2018.  But equally significant has been VW’s decision to develop cars specifically for the U.S. market for the first time, including the new Passat sedan being produced in Tennessee.

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Sales of the new Passat got off to a fast start for the 2012 model-year, helping Volkswagen score its best monthly volumes in four decades in February.

“This is a clear sign that the plant ramp-up has been successful and is a validation that the Passat is of the highest quality,” said Frank Fischer, CEO of the Chattanooga operation.


VW Sales Top 4 Million in 1st Half of 2011 – Positioning Maker as Global Number 2

Time to “stay on the accelerator,” says CEO.

by on Jul.14, 2011

New products like the 2012 Passat are helping VW target global leadership by late in the decade.

Despite posting a record 4 million sales for the first half of 2011, Volkswagen AG needs to “stay on the accelerator” if it hopes to achieve its goal of being the world’s largest carmaker, the company’s CEO says.

The maker is counting on growth in the U.S., as well as emerging markets like China, India and Brazil, to keep the momentum going, added another senior executive, who said that VW’s multi-brand strategy is giving the maker a distinct advantage over the competition.

“Volkswagen continues to stay on the accelerator in all markets and vehicle segments,” said Chief Executive Officer Martin Winterkorn.

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The company posted a record 7.2 million sales in 2010, and has been forecasting growth of another 5% this year, but the actual pace is exceeding expectations.  The core Volkswagen Group gained 12% during the first half of 2011, to sell 2.53 million cars, trucks and crossovers.  That pushed total sales of the group’s dozen brands to more than 4 million.

That appears to have positioned VWAG as the globe’s second-largest automaker, behind General Motors but ahead of Toyota, which has lost more than a half million units of production since Japan was struck by a devastating series of disasters on March 11.


Auto Industry on Hiring Binge

Domestics and imports both putting out “Help Wanted” signs.

by on Jul.07, 2011

VW has already hired 2,000 workers at its new Chattanooga plant and will add still more for a planned second shift.

It seemed like the best of times; following its takeover by the German Daimler AG, Chrysler counted nearly 71,000 hourly workers on its U.S. payroll.  But by the time the partnership collapsed and the maker was rapidly plunging into bankruptcy, in 2009, the blue collar workforce had slipped to just 21,000.

The situation wasn’t all that different across town.  As the industry sank into its worst recession since the Great Depression of the 1930s, and many analysts began to doubt whether Detroit’s Big Three makers would survive, the makers raced to close plants, abandon unpopular brands and slash employment.  Once employing close to a million hourly and salaried workers worldwide, General Motors emerged from its own run through Chapter 11 with a workforce barely a tenth that size.

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But two years later, there’s a very different situation.  Chrysler, for one, has boosted its blue collar headcount by more than 2,000 since hitting bottom in ’09, and several company sources tell that the maker is likely to keep rebuilding its factory rolls, especially if sales and share keep rebounding.  GM and Ford are also hiring.

And the “Help Wanted” signs aren’t just out in Detroit.  The new Volkswagen plant in Chattanooga, Tennessee has already hired 2,000 workers, while that number will grow by at least another thousand when the maker adds an anticipated second shift at the sprawling factory, which is producing an all-new version of the midsize Passat designed specifically for the American market.


First Drive: 2012 VW Passat

Striking a balance between German engineering and American tastes.

by on Jun.14, 2011

The new, 2012 U.S. version of the Volkswagen Passat shown at the maker's new plant in Chattanooga.

Volkswagen is betting big on the United States, as evidenced by the construction of a brand-new plant just outside of Chattanooga, Tennessee.

That plant, which will build the North American version of the new 2012 Passat (Europeans will get a slightly different version), is set up to produce up to 150,000 units annually on two shifts.

That would mark a significant expansion for the German maker, which has long struggled to regain the foothold it had in the U.S. market in the ‘60s and ‘70s.  It would also help move VW ahead as it takes aim at rivals Toyota and General Motors in a big to become the world’s number one automaker by 2018.

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The redesigned Passat, following close upon last year’s updates of the Jetta and Touareg, is the next step in that plan. So is the production shift to the States.

The company is hoping to keep production and distribution costs low, so that the sticker price of the Passat can be brought down to a level that won’t send price-sensitive American motorists screaming in horror and heading to the nearest Hyundai showroom.


VW May More Than Triple Size of Chattanooga Plant

From bomb bunker to ground zero in the battle for automotive supremacy.

by on Jun.14, 2011

A nearly-completed 2012 Passat gets ready to roll off the line at VW's new Chattanooga plant.

If some of the early construction crews were a little nervous when work began on the new Volkswagen plant in Chattanooga, three years ago, they had a good reason.  In an irony not lost on members of the team overseeing the project, the mounds dotting the abandoned site had once housed World War II – era bunkers where the U.S. military stored bombs that would eventually be dropped all over Germany – perhaps on the VW plant in Wolfsburg, in fact.

To everyone’s good fortune, the bunkers proved empty.  And the fact is, these days, relations are a lot friendlier between the two countries.  But the sprawling facility is still on a war footing of sorts.

After years of dithering over its role in the U.S. market, Volkswagen has made a commitment to more than double its sales by 2018, to at least 800,000 vehicles annually.  Meanwhile, it hopes to bump its worldwide volumes to more than 8 million, Volkswagen AG CEO Martin Winterkorn declaring, the company “continues to have its sights firmly set on capturing pole position in the automotive industry.”

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Chattanooga will play a critical role in meeting that goal – and that means that the plant that formally opened in the Southern heartland, last month, could very well undergo a significant expansion in the very near future.  Indeed, has learned, capacity could readily more than triple, according to a senior manager, “if it were appropriate.”


Low Pay Big Advantage as VW Opens New U.S. Plant

New factory could help Volkswagen double U.S. demand.

by on May.23, 2011

The first 2012 VW Passat will officially role off the maker's new assembly line in Chattanooga on Tuesday.

When Volkswagen opens its new U.S. assembly plant tomorrow, it will be a critical step in the maker’s plan to double sales by 2018 – in part by relying on low wages to help make models like the all-new 2012 Passat more competitive.

The average blue-collar worker at the new factory, Chattanooga, Tennessee, will earn just $27 an hour – including wages and benefits – or barely half the average $52 an hour for workers at Detroit’s union-organized plants.  VW will also have a significant cost advantage over other so-called transplant assembly lines operated by Japanese and other European makers.

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That could provide a significant boost for a company that has been saddled with a heavy premium on products imported from Germany, where high labor costs have been compounded by the weak U.S. dollar.

VW has been pressing hard to emphasize value – something that worked for the legendary Beetle nearly half a century ago – rather than focusing on German engineering as an excuse for higher prices.  When it launched an all-new Jetta, last year, it introduced a stripped-down model, the Jetta S, at just $15,995 — $2,000 lower than the starting price for the 2010 model.