Volkswagen CEO Herbert Diess has explained that the automaker would very much like to get back in to the United States’ good graces now that it has cut ties with Russia. With the future of Europe looking shaky, VW is hoping to maintain its position as the best-selling brand in China and start making inroads in America after burning a few bridges there.
Despite the Dieselgate scandal being seven years in the rearview mirror, the automaker is still coping with the resulting financial penalties and the resulting decision to scale back its U.S. aspirations a tad until its electric models hit the road. But the company has always had an issue understanding what American drivers wanted, resulting in boom and bust phases for the company until it manages to solve the puzzle. The most common issue was an inability to adhere to ever-changing emissions standards. But there are also periods where the manufacturer was snubbed for offering subpar electrical equipment or simply having a lineup that was out of sync with American tastes. But Volkswagen has historically enjoyed a resurgence after making the necessary changes and Diess is hoping for another comeback.
Volkswagen is furloughing around 1,500 assembly workers in Chattanooga, TN. Production is being idled on account of the coronavirus, making VW just one of many brands enacting a temporary shutdown. While the number of employees affected varies between reports, VW-Chattanooga spokeswoman Amanda Plecas said around 2,500 employees will be furloughed on April 11th. The downtime is expected to last roughly four weeks.
“Our primary objective is to protect the financial health of Volkswagen for the benefit of our team as we address the emerging and ongoing impacts of the COVID-19 outbreak on our industry,” Tom du Plessis, president and CEO of Volkswagen Chattanooga, said in a statement. “Right now we have limited visibility on when we will be able to resume production, but we are committed to doing everything we can to preserve jobs. During this time we will be intensely focused on preparing to reopen in a responsible way, ensuring our team has the opportunity to return to work safely and as quickly as practicable.”
Volkswagen’s investment into its U.S. manufacturing presence doesn’t end with an expansion of its only domestic assembly plant. The battery packs needed to power a new range of fully electric models will originate at the same site.
The automaker announced the kickoff of construction Wednesday, detailing how it plans to spend its $800 million.
The results of a Friday vote are in, and Volkswagen can breathe a sigh of relief. Five years after the United Auto Workers first attempted to place the automaker’s Chattanooga, Tennessee assembly plant under its umbrella, a second vote has yielded the same results.
Weeks and months of acrimony, ads, accusations, and other seemingly unavoidable aspects of union organizing led to a narrow win for the no-union side. As before, Southern auto plants remain just beyond the grasp of the UAW.
Volkswagen’s singular U.S. plant has toyed with the idea of unionizing for the past five years. Chattanooga Operations, in Tennessee, initially seemed fine with the establishment of a German-style works council. However, while the United Auto Workers’ first attempt to seal the deal with votes failed in 2014, the union has since managed to rally more staff under its banner.
The UAW is now calling for another vote (its fifth), claiming a majority of the facility’s hourly workers are on its side. Meanwhile, Tennessee Gov. Bill Lee spent the first part of this week pleading with plant staff not to unionize.
Volkswagen spent the past year and change hinting that its Chattanooga, Tennessee assembly plant could become ground zero for an electric American product offensive, and guess what? That’s exactly what VW plans to do.
In a not-at-all surprising announcement, the German automaker said it plans to build electric vehicles at its only American plant, which just happens to have plenty of excess capacity. Backing up this promise is $800 million, which, in addition to funding the necessary tooling, should lead to the creation of 1,000 new jobs.
Volkswagen’s Atlas Tanoak concept was one of the few interesting products to emerge from last week’s New York auto show, but the Atlas-based pickup remains a one-off for now. The automaker plans to judge consumer interest before making a decision to scrap the idea or sign off on a production version. Naturally, with VW staking it’s U.S. fortunes on light trucks, the volume-seeking company would like to get as much mileage out of its Atlas architecture as possible. See the two-row Atlas Cross Sport for Exhibit B.
But does the Tanoak’s future hinge on Americans expressing an overwhelming desire for a VW truck? Not entirely.
June 2017 was only the Volkswagen Atlas’s first full month on sale in the United States, but the Atlas, still ramping up inventory, already accounts for more than half of Volkswagen’s U.S. utility vehicle sales. In fact, the only Volkswagens that sold more often than the Atlas in June were the Jetta, Passat, and (if you count all variants together) the Golf.
2,413 units is not a terribly impressive number, although it’s stronger than what the Mitsubishi Outlander, Ford Flex, Mazda CX-9, and Volkswagen’s two other utility vehicles managed last month. But the rate at which Volkswagen is building the Atlas at the company’s Chattanooga, Tennessee, assembly plant suggests dealers are only beginning to see just how many copies of the Atlas they’ll soon have to sell.
Will there be buyers?
Volkswagen’s sole U.S. assembly plant was spared any fallout from the company’s wildly expensive diesel emissions scandal, but the upcoming North American Free Trade Agreement negotiations could see VW throttle back its future plans for the facility.
The Chattanooga plant, which builds the Passat and Atlas, has seen $900 million in investment over the last couple of years. More models are anticipated, and the automaker said it expects the plant to reach full production by 2020. However, recent threats of an import tax to be levied on German automakers has VW brass in wait-and-see mode before sending any new models or money to Tennessee.
Through the first four months of 2017, Germany-based automakers and their respective subsidiary brands have sold 413,000 new vehicles in the United States.
At a minimum, 28 percent of those vehicles were built in the United States at assembly plants in Alabama, Tennessee, and South Carolina. According to Automotive News, BMW, Mercedes-Benz, and Volkswagen combined to produce 281,519 vehicles, the bulk of which were destined for export.
But to avoid even a faint whiff of statistical manipulation, TTAC has compiled the complete U.S. sales and production picture for each of these manufacturers. We present them to you with [s]no[/s] limited commentary.
This is the new News Round-up where we cover all the things you should know that may or may not deserve a headline on their own (or we may have simply run out of time to cover them). It’s similar to the “While Your Were Sleeping” news coverage, but not the same, hence the name change.
This morning, Jaguar announced they are going racing again, the automaker formerly known as Saab has a business plan and the Tesla Model X has a price spread that would make Porsche blush.
Skilled trades workers at Volkswagen’s Chattanooga Assembly Plant in Tennessee voted Friday overwhelmingly to join the United Auto Workers union, the first UAW victory at an automotive plant in the South, Reuters reported.
The union vote was the first victory for the UAW, who tried unsuccessfully in February to unionize the entire plant, which included nearly 1,500 production workers. In August, the union filed to open voting only to maintenance workers and ballots were cast Friday.
Friday’s victory for the UAW only incorporated just over 10 percent of the overall workforce. According to the Chattanooga Times Free Press, 152 skilled trades workers voted in Friday’s ballot question.
Volkswagen has halted production of the Passat TDI at its Tennessee plant, because if you can’t sell ’em you may as well stop building ’em.
The stop-order comes as the automaker is ramping-up production of the new Passat in Chattanooga for sales set to begin later this month or in early December, according to Automotive News, and is yet another result of the ongoing diesel emissions scandal.