By on March 22, 2012

For the second time this year, Volkswagen is increasing headcount at its Chattanooga plant. After hiring 200 new workers in January, Volkswagen now created an additional 800 new jobs.

In the beginning of the year, 2,500 people worked at the Chattanooga factory. With this new wave of hirings, Volkswagen will have created 1,000 new jobs in Chattanooga this year. Volkswagen needs to fill the positions to meet customer demand for the new U.S.-produced Passat. The plant has been working daily overtime to keep up with the sales.

According to Edmunds, February 2012 was the biggest month for the Passat (8,189 sales) since August 2003. The Passat’s average days to turn was 55 percent lower than the industry average in the midsize segment last month. A Passat sits only an average of 24 days on dealers’ lots, the industry average in the class is 54 days.

Edmunds Senior Analyst Michelle Krebs encourages Volkswagen to add more cars to the plant:

”For now, at least, this extra production will absorb the Passat’s jump in demand in the US. But further down the line, Volkswagen will need to produce even more vehicles in the US to expand its product offerings — a small crossover, for instance — and meet its lofty sales goals.”

Volkswagen wants to sell 800,000 units annually in the U.S. by 2018. Edmunds says that VW will need to grow an average of 13.8 percent each year through 2018 to reach that goal.

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49 Comments on “Volkswagen Bulks Up Chattanooga Plant...”


  • avatar
    kitzler

    Good job VW, Herr Pietsch should be proud, eat your heart out Carlos (like in Gohsn) and Sergio (like in Marchione); all this extra VW will eat into your Nissan and Fiat sales, maybe some GM and Toyota too. there is nothing like German precision engineering!

    • 0 avatar
      Volt 230

      plus horrendous reliability!

      • 0 avatar
        salhany

        The latest numbers over at True Delta for the new Passat are eye-searingly awful. Maybe they should stop trying to build so many and start making them with more care?

      • 0 avatar
        DeadWeight

        VW is going for North American market share, propelled by the ominous clouds over Europe, and what are contractionary PMI numbers out of China for many months (9, in fact) now.

        This explains the 50 state $219/month VW Passat SE lease, I would assume (although the national lease programs specifies $1,999 due at signing, they’re doing this promo in $0 down sign & drive form at my local dealers).

        I think VWs move to capture market share in North America is a smart one, as there really are major former growth pockets that already are or may very well slow down for them, and it’s wise to get more consumers into VWs on the assumption that new VWs are more ‘Americanized’ than ever now, and are in fact a credible alternative to Toyondissan (I’m not speaking as to whether they are or are not, but if they prove relatively reliable and as comfortable or more so as the Japanese competition, this will pay off in spades for VW robustly strengthening an important foothold that they formerly paid far less attention to).

  • avatar
    threeer

    There is always that worry about the overall reliability. I’ve not dived into Michael’s data on exactly what the nature of the failures/concerns are for the new Passat, but it really is a shame. In price, style (always subjective!), drive and size it would be a good fit for my mother. But then I think that she drives a car for 10 years and can’t justify telling her to consider this one…she wouldn’t handle reliability issues very well.
    Let’s hope the folks in TN don’t fall into the same death spiral that sank the folks in PA back in the day.

  • avatar
    Remi

    I really don’t understand why they can’t seem to build reliable cars. The European Passat seems reasonably reliable in Europe, and I doubt that the American workforce is any less skilled or dedicated than the German one…At least no one can blame the UAW this time.

    • 0 avatar
      PintoFan

      Reliability has very little to do with where a car is assembled. It has much more to do with the quality of engineering and parts.

      • 0 avatar
        Remi

        That’s my point… the European VW seem to have reasonable reliability – not great, but not terrible.

      • 0 avatar
        jmo2

        “not great, but not terrible.”

        It’s the same in the US. The gap isn’t nearly as big as the B&B here at TTAC seem to think.

      • 0 avatar
        Sundowner

        I would ponder from my own VW experiences that the German built models I’ve owned have fared far better than the Mexican ones. I disagree with the concept that engineering is a bigger play in reliability than assembly: every warranty repair I had on my Jetta was an assembly failure. Tennesee ranks in the bottom 10 in education of US states. I would ponder this might be part of the problem, as well.

      • 0 avatar
        threeer

        Engineering/quality built into the components and the overall processes/procedures implemented play as large (if not a larger) role in overall quality. Build and design a robust, repeatable/reproducable assembly system with parts that come from like-designed suppliers and you get a high-quality product. It’s why folks like Toyota and Honda can build reliable cars in Kentucky and Ohio…they transferred their production philosophies, practices and procedures to the USA and proved that it wasn’t the lack of American capability that plaqued GM/Ford/Chrysler. American workers were and are quite able to make high quality vehicles, if designed right (both the vehicle and the process in which they are assembled).

      • 0 avatar
        Pch101

        “Tennesee ranks in the bottom 10 in education of US states. I would ponder this might be part of the problem, as well.”

        Individual workers play little role in product quality.

        A well managed production facility should be able to make good products with mediocre people. If it can’t, then it isn’t a well managed assembly line.

        It’s possible that one plant can do a better job than another, but that would have more to do with the processes used to manage the operation than the individuals who work there on the line. The line workers are basically cogs in the machine and are interchangeable. If the plant can only function when the workers are unique and heroic, then some folks in management are blowing it, big time.

      • 0 avatar
        Lokki

        I suspect that the suppliers are not the same for the US cars and the Euro market cars. We’ve seen that before from VW and others.

        Ones does wonder about the continuing quality problems that VW seems to have in their US cars.
        At what point does increased market share just mean that more people learn not to buy them anymore?

    • 0 avatar
      tparkit

      My sense of it has long been that poor reliability from German automakers is driven by a cultural characteristic that runs through big business there: “We tell the customers, they don’t tell us.”

      IMO, German engineers and managers at these companies consider themselves the experts, a distinction they pique themselves on and guard closely. Admitting the value of listening to someone else sometimes would take them down a notch, and smudge that glistening, elite exterior they like to present.

      Perhaps the Germans here will comment to support, refute, or modify that view.

    • 0 avatar
      bd2

      “That’s my point… the European VW seem to have reasonable reliability – not great, but not terrible.”

      – Uhm, not in Germany according to AutoBild where VW continues to lag near the bottom.

      • 0 avatar

        In Germany Toyota cars always were most reliable cars. Rent grade Corollas are reliability champions for decades. Kia has a highest satisfaction rating. I do not remember VW being anywhere on the top. So I do not know from where it comes that VW makes reliable cars in Europe – TUV data does not support it. VWs simply are not as boring as Toyota and other Asian cars and hold value better over time. They are also considered more premium than Ford or Opel.

  • avatar
    PintoFan

    It’s a good thing they hired 1,000 more workers. It will enable them to churn out substandard products considerably faster than they did before.

    Is anybody else getting shades of Westmoreland from this?

  • avatar
    Volt 230

    Camry is built in Kentucky, and it’s among the most reliable cars anywhere, so what diff dose that make? My Corolla was built in NUMMI plant a GM-Toyota joint operation and it’s been the most reliable car I’ve ever owned. Don’t blame the state or the assembly workers, it’s a matter of administration and quality control in every facet of the build/design and engineering process.

    • 0 avatar
      geozinger

      I sold Toyotas for a while. If the assembly origin is of no difference to consumers, why did people look specifically for cars with a J serial number?

      It wasn’t just Camry’s either. We had the same thing with folks at our Honda and Nissan stores, too. I have friends who would only buy the higher end VWs (with a German serial number) rather than the cheaper Mexican-built cars.

      I get what PCH101 is saying, but I do think that every plant and every team in that plant has a culture or an ethos of how they do their job, and that it shows in the final product.

      • 0 avatar
        racer-esq.

        The VW problems that I have heard of almost always sound like defective design issues, not defective manufacture issues.

        If anything The North American made VWs are probably more reliable, because they are simpler, lower content cars, and complexity is the enemy of quality.

        That said, it cannot be assumed that everything is else is constant between a final assembly shop in one continent and another. Many components are going to be sourced locally, potentially from different suppliers.

      • 0 avatar
        bd2

        The Lexus RX is mostly produced in Ontario for the US market and it has done better reliability-wise than other (made in Japan) Lexus models.

      • 0 avatar
        DeadWeight

        Similarly, aren’t almost all Honda CR-Vs made in East Liberty, Ohio AND Mexico?

        I raise that point (assuming it’s factually correct) because it’s among the most reliable vehicles of all time according to Consumer Reports.

      • 0 avatar
        Pch101

        “If the assembly origin is of no difference to consumers, why did people look specifically for cars with a J serial number?”

        Consumers aren’t always well informed.

        “I do think that every plant and every team in that plant has a culture or an ethos of how they do their job, and that it shows in the final product.”

        The whole point of an assembly line is to negate the problems created by the inconsistency of humans. The same design, assembled with the same parts and the same processes, should yield similar results because the human element, i.e. the factor that can most adversely effect product quality, is kept to a minimum.

        However, factories in different countries will probably rely upon different suppliers, and they may be managed differently. If a factory in one country is more poorly managed and/ or uses inferior parts, then the product will be worse, and the degradation will be associated with that assembly location.

        But barring a conspiracy on the line to sabotage the product, the result doesn’t have anything to do with the individual laborers who are doing the work. The process should be designed to catch errors and to identify bad parts and processes; if it doesn’t, then the problem is with the process. The companies that do a better job with parts, process and engineering will build better cars than those that don’t.

  • avatar
    geozinger

    VW seems to have a wishy-washy policy about US sales in the last 20-25 years. They reached a nadir in the early 90′s where they (allegedly) considered pulling out of the US market. Then, they got serious about warranties (at least) and brought sales back up to a decent enough level for a while.

    I wish Piech & Co. good luck with their ambitious sales goals. It’s not like Japan Inc,. and Korea, Inc., are not using US sales as a source of money to bankroll future plans. Ford, GM and Chrysler/Fiat are not wanting to cede market share in the US, either. It would be impossible for all of these players to use the US market as a cash cow. But home markets in Europe and Asia are not in the best of health, so what choice do they have?

    Let the games begin.

    • 0 avatar
      bd2

      The auto market in Korea is fine – which is why the Germans and Japanese are angling for an even bigger share, not to mention the domestics.

      • 0 avatar
        geozinger

        @bd2: I didn’t mean to imply that Korea is looking bad, but I could see how you could read that into my remark. I meant the markets of Japan and China. Japan has had it’s issues for a long time now, but the instability in China’s market has some folks worried.

  • avatar
    mikey

    Its refreshing it is to see that “some” of the B&B have got it figured out. Pinto Fan,Volt 230,threeer,Pch 101….you guys get it.

    If the VW that comes out of Tenn, turns out to be a POS it has nothing to do with the line worker.

    It seems to me that we have folks that swear by VW’s. We also seem to have them that swear at the same vehicle.

    Who knows?
    I don’t care what country,state,company,shift,or day of the week,your car/truck was assembled.
    Management,and only management is responsible for the end product.

    • 0 avatar
      Lokki

      Mikey and I agree on this one.

    • 0 avatar
      Toad

      Management AND line workers are responsible for product quality. The “Us vs. Them” mentality of the Detroit automakers and the line workers both contributed to some awful quality problems. GM’s Lordstown OH plant was well known for employees sabotaging the cars built there. But don’t take my word for it…

      NPR’s This American Life did a great episode of life inside the GM Toyota NUMMI plant: http://www.thisamericanlife.org/radio-archives/episode/403/nummi

      “Rivithead” is a great book about life on the auto assembly line from the perspective of the line worker: http://www.amazon.com/Rivethead-Tales-Assembly-Ben-Hamper/dp/0446394009

      Bad engineering guarantees bad products, but careless or actively hostile assembly workers can do just as much damage.

      • 0 avatar
        Pch101

        “Management AND line workers are responsible for product quality.”

        The NUMMI experience provides the exact opposite lesson.

        Fremont was one of the worst, if not the worst, plants that GM had. Let’s see what TMC did:

        -It changed the management
        -It built cars engineered by Toyota, instead of by GM
        -It used parts sourced by Toyota, instead of by GM
        -It changed the process of work from mass to lean production
        -It changed the nature of the relationship between labor and management

        Here’s what TMC didn’t do:
        -Hire a completely new labor force.

        If memory serves, Toyota kept about 85% of the line workers who GM had had on the payroll. The same people who were allegedly f**kups when working for GM were, in fairly short order, producing cars with quality equal to what was coming out of Japan.

        The difference was in the management. When management gives the workers a better car to build and better parts to build it with, on an assembly line that uses better processes and with a management structure that is flatter and less adversarial, then the product improves. The line workers individually make almost no difference at all.

    • 0 avatar
      joeaverage

      How a person feels about VW quality also lies with how big a car’s problem needs to be for a “show stopper” for that person. I can rebuild engines, restore antique vehicles, weld, machine parts, troubleshoot EFI, troubleshoot electrical problems, etc. I also have a well equipped garage. Nothing is that big a deal to me if I have the time to deal with it.

      Other folks are entirely reliant on a mechanic or dealer for each and every hiccup. The CEL comes on and there they go to hire the dealer (often overpriced) to fix it when it might be a tiny problem like a broken vacuum line or loose gas cap.

      This is the problem with quality surveys. It appears to me that an engine failure is counted the same as a defective volume knob on the stereo or seat adjustment lever.

      As the owner of three VWs (two aircooled and one watercooled ’97) I don’t recommend them to friends and family b/c they do seem to have alot of little faults. I really like something about some of the VWs.

      My VWs over the years tend to have little faults I can deal with for $10-$25. My ’97 Cabrio cost me a hundred bucks last year in repairs and this year I’m going to spend a little to get the cosmetics up to date in anticipation of selling it. During my ownership all of the repairs were for low quality material failures. VW using plastic or nylon when they should have used aluminum. Low quality gaskets. What appears to be low quality steels in some cases b/c my Honda has the original exhaust system at 230K miles where the VW’s exhaust system turned to rust and fell off though that may be related to the first owner as much as anything.

      This same car would have cost a person dependent on a mechanic perhaps over a thousand dollars to fix a little of this and that. $25 for the part and $75 for the labor.

      I find that many of the folks dependent on a mechanic don’t notice a problem in the making. I drove a friend’s GM the other day and asked if they had noticed the worn out front wheel bearing. No. Not at all I was told. It was to the crunchy phase where the rumble in the bearing is rough enough to be felt in the steering wheel. FWIW a big Ford 4WD buddy has the same problem and did not notice either. People seem to have their heads focused on something else like who is going to get voted off tonight’s reality show or the song on the radio or telling somebody on the cellphone what was said at work today.

      One problem leads to another b/c they aren’t paying attention to it and then it’s the car’s fault for need three replacement parts instead of one.

  • avatar
    Volt 230

    When the current CEO of Huyndai took over, he declared that quality would be the top priority in his company and he would not rest until this was achieved, VW needs the same kind of commitment from the top on down and I just don’t see it, it’s all about getting bigger and selling more and buying out other brands. Period.

    • 0 avatar
      Fusion

      “Becoming the highest quality manufacturer/having the highest customer satisfaction” are also targets in VW’s “strategy 2018″, equal in importance to volume, profitability and “being the best employer”. They just don’t get as much press…

      • 0 avatar
        Dan

        Hyundai’s reputation turn around didn’t come out of a PR department. It took two generations of increasingly competitive product at loss leader pricing, backed by an industry leading warranty which was the focus of a multi year advertising campaign.

        VW can strategize all they want, that’s not the same as backing your products.

    • 0 avatar
      Pch101

      The importance of the company car market in Europe is a barrier to improving reliability. With about half of new car buyers in Europe getting their cars as part of an employment package, with the expectation that a new car will be replacing it within a few years, there isn’t much reason for the automakers to care. Combined with the lower average mileage that Europeans drive, and the bar can be set lower still.

      On the other hand, Americans have uniquely high demands for reliability. We drive more than everyone else, yet most of us don’t want to fix anything. So you can’t really use the US market as a yardstick for measuring the norm, either.

      The Germans focus on leasing not just because it allows more consumers to afford their cars, but also because it’s the business model that most closely resembles the company car model that works so well for them at home. If an American buyer is willing to lease a new car every 2-3 years into perpetuity, then reliability is no longer a big deal here, either. Lexus no longer offers much of a competitive advantage for those who are willing to have a car payment for life.

  • avatar
    mikey

    @Volt 230….Exatly, and how has that policy worked out for Huyndai?

  • avatar
    Volt 230

    Their sales are way up, their products are up there with the best, sometimes even better than the Japanese brands, that’s how it’s worked out.

  • avatar
    Beerboy12

    Much of the new VW sales might be because Americans are a little gun shy of domestic brands. VW’s cannot, in any universe, be less reliable than some of those older domestic products either. The new ones I think are better.
    For those Americans that think that they don’t care for unreliable cars, remember, VW is the No. 1 seller in Europe and the European’s, especially the Germans have even less tolerance for unreliability.

    • 0 avatar
      DeadWeight

      There are two things that I am quite confident about:

      1) Buyers of these new VWs who experience reliability woes, especially if the ‘woes’ are far greater than their last non-VW car, will swear off VW in short order; regardless of the similarities or differences between Americans and Germans, history has proven that Americans EXPECT relatively good reliability, period, end of story.

      2) VWs are without question, as a make, among the least reliable cars sold in North America, and that’s according to every single reliability index I’ve seen (and Consumer Reports essentially puts the black pox on any VW vehicle, with maybe 1 or 2 exceptions, that’s 3 or more years old).

      I don’t know why Germans do what they do or think what they think.

      I do know that if VWs cars are as dreadful in the reliability department as I’ve been reading about and hearing about, they’re already digging their own grave in the U.S., again.

      That’s Das Truth.

    • 0 avatar
      CJinSD

      “For those Americans that think that they don’t care for unreliable cars, remember, VW is the No. 1 seller in Europe and the European’s, especially the Germans have even less tolerance for unreliability.”

      If Germans care about unreliability then they’ve got a funny way of showing it. Their cars are more reliable than most other European cars, but that’s like having the best hygiene in a Washington DC crack house. Europeans care so little about reliability that they’d rather buy French cars than Japanese ones. It is an absurd suggestion that reliability is important to Europeans relative to its importance to Americans.

      • 0 avatar
        joeaverage

        I know when I lived in Italy going to a mechanic was not the wildly expensive experience it is here. I could actually afford to rely on a mechanic there for a few cold weather fixes when I would otherwise be working in my driveway.

        At the time I could take a carb to a mechanic to be rebuilt for $30, an alignment was $35, and parts were affordable at the local autoricambi. The rest of what PCH101 said above is correct – Italians I knew back then (1990s) mostly drove fewer miles. However none leased and none replaced their cars very often. However this was southern Italy (Naples) and Northern Italy or the rest of Europe may have been vastly different.

  • avatar
    roadscholar

    Excellent discussion. The auto line worker is usually the first one to be blamed for poor quality. Management is 100% responsible for setting up processes and suppliers that make the assembly process as idiot-proof as possible but you cannot deny that the assembly line worker also plays a role. The job is very robotic but it is nevertheless a job that still has to be performed well. Everyone who touches that car bears some of the responsibility.

  • avatar
    cheezeweggie

    I’ve never known anyone who drove a German car that didn’t have U-boatloads of problems.

    Side note: The mountains in the background of the photo aren’t in
    Chattanooga.

  • avatar
    CrapBox

    I’ve driven a VW Rabbit for the past six years and it’s been 100% reliable. Although I drive in terrible weather conditions on some of the worst roads in North America, nothing has gone wrong the car. Maintenance has consisted of oil changes.

    So what gives? I wish people would be specific regarding their complaints. Does a squeak constitute a reliability issue?

    I grew up in a car dealership surrounded by every make of vehicle from Gogomobils to Toyotas. My Rabbit has been, by far, the most reliable.

    • 0 avatar
      TOTitan

      I have the same experience as crapbox. My daughters 08 Rabbit (german made) has never had an issue, not even a rattle or squeek. It funny how vw reliability seems to vary so much between models.

      • 0 avatar
        DeadWeight

        You and crapbox bought what is one of VW’s most reliable cars, according to Consumer Reports.

        In fact, based on my recollection, the basic 2008 forward Rabbit with the 2.5 liter has garnered either an above average or at least average rating for 3 or 4 years running now. I believe this includes the versions Hecho En Mexico (and interestingly, I’m not sure that the GTI which was assembled in Germany was ranked as highly).

        Some do and some don’t put stock in the credibility of Consumer Reports reliability ratings. I do, because 1) they use a larger sample size of actual registered owners and vehicles (hundreds of thousands) than any other publication to track complaints, 2) they break the complaints down in terms of what component is either reliable or not in a very logical, easy to sort manner, 3) they adjust the reliability index on a smoothed basis for age of the vehicle and presumed use, and 4) their published data corresponds almost perfectly with my vehicle ownership experiences.


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