Volkswagen Chattanooga Assembly Plant

The Volkswagen Chattanooga Assembly Plant (or Chattanooga Operations LLC) is an automobile assembly plant in Chattanooga, Tennessee employing approximately 2,000. The plant was formally announced in July 2008 and began production of the Passat B7 (initially called the Passat NMS (New Midsize Sedan)) in April 2011 prior to being formally inaugurated in May 2011.[1][2] The plant began production in April 2011 with a version of the 2012 Volkswagen Passat NMS, tailored to the US market,[3] and has a projected annual production of 150,000 cars. Production of the Volkswagen Atlas commenced in 2017.[4][5] In 2019, VW announced that the I.D. Crozz and Buzz all-electric vehicles would be produced at the plant in a new electric vehicle division beginning in 2022.[6][7]

Volkswagen Chattanooga Assembly Plant
TypeSubsidiary
IndustryAutomotive
Founded24 May 2011 (2011-05-24)
HeadquartersChattanooga, Tennessee
ProductsAutomobiles
BrandsVolkswagen
OwnerVolkswagen AG
Number of employees
3,800

Background

The local plant, building a localized product, allows Volkswagen to avoid exchange rate fluctuations, monitor US automotive market trends,[8] and potentially reduce vulnerability to extended supply chain issues.[9] At its outset, Chattanooga Assembly manufactured 85% of the Passat's content,[10] and about 85% of the content of the North American Passat comes from North American Free Trade Agreement (NAFTA) countries.[9][11] The company initially had plans for an expansion that would increase capacity to 592,000 vehicles a year.[12] Labor costs at the Tennessee plant, including wages and benefits, have been estimated to average $27 an hour, below those of Ford, GM, Chrysler, and some foreign automakers.[13] As of late 2012, cars manufactured at the Chattanooga Assembly Plant have been exported to Mexico, Canada, South Korea, and the Middle East.[14]

The Chattanooga plant opened 23 years after the closing of the Westmoreland Assembly Plant near New Stanton, Pennsylvania, in 1988.[10] The Westmoreland plant, which began operation in 1978, had been characterized by labor unrest and suffered from poor networking between Westmoreland and Volkswagen headquarters in then-West Germany.[15]

Site

The entire facility includes approximately 1,900,000 square feet (180,000 m2),[16] and is constructed on a 1,400 acres (6 km2) parcel of the 6,000-acre (24 km2)[17] Enterprise South Industrial Park in eastern Chattanooga.[18]

The industrial park comprises land that was once an ammunition plant[19][20] known as the Volunteer Army Ammunition Plant (VAAP),[18] which manufactured up to 30,000,000 pounds (14,000 t) of TNT (trinitrotoluene) per month during World War II, the Korean War, and the Vietnam War.[21] The Volkswagen facility is near a remaining storage area containg storage bunkers once used to store TNT.[17] The site features nearby hiking, biking and walking trails, picnic areas, and overlooks, known as the Enterprise South Nature Park.[17]

Models
Volkswagen Atlas

Design

The Volkswagen Chattanooga Assembly Plant includes a body shop, paint shop, assembly facility, a Market Delivery Options (MDO) building,[22] technical testing center, employee training facility with classrooms, an apprentice-training school and a full-size practice paint booth,[15] a supplier park for eight companies,[3] and a 32,000-square-foot (3,000 m2) healthcare center with a gym, childcare facilities, and medical services.[23]

The plant has the flexibility to build any of the company's front-engine/front-wheel-drive vehicles in A, B, or C-segments.[15] The rolling-dip paint shop is sized to handle a wide range of vehicle sizes. The plant is not designed to manufacture large vehicles.[15] The factory includes 383 robots in the body shop, which is approximately 77 percent automated. There are 4,730 weld spots and 292 welding guns. Output is about 31 cars per hour.[15] The plant is organized with its major process areas – body shop, main assembly, and paint shop – in a stacked configuration with major checkpoints arranged in a concentric-circle layout – to eliminate long walks between factory areas, to investigate a problem, for example.[15] The body assembly line uses diode lasers.[24]

VW announced it would seek Leadership in Energy and Environmental Design certification for the complex.[15] In November 2011, VW announced that the 2012 model of the Passat was named the 2012 Motor Trend Car of the Year.[25] In December 2011, the Assembly Plant became the first auto plant in the world to get the LEED platinum certification.[26] A 9.5 megawatt solar park supplies 13 GWh of electricity per year; 12% of plant consumption.[24][27]

The Volkswagen Chattanooga Assembly Plant was designed by the Nashville engineering and architecture firm SSOE, the firm Environmental Resources Management (ERM) for the environmental permitting process, and Alberici Constructors, Inc. for the construction management of the facility.[28] The Port of Savannah, Georgia's Garden City Terminal handles imported auto parts in containers for the plant.[29]

Cost and incentives

Volkswagen invested approximately one billion U.S. dollars to construct the facility, with local, state, and federal governments subsidizing the project with an estimated $577 million in incentives.[20] Alabama had offered Volkswagen incentives of $385 million, the most the state had ever offered for an auto project. Mississippi offered incentives totaling $294 million to Toyota in 2007 for an assembly plant at Blue Springs. Kia received about $324 million in incentives from Georgia.[30] Volkswagen had researched 398 possible sites before narrowing the choice to the states of Michigan, Alabama, and Tennessee.[15]

Work council and labor unions
See also: US labor law, Work council, and Labor union

The Volkswagen Chattanooga Assembly Plant has attracted international attention after it was proposed that employees elect a work council for consultation and participation rights with management, in order to improve production.

The United Auto Workers attempted unsuccessfully to unionize the Chattanooga plant in 2014. This was defeated in a 712-626 vote. It was backed by Volkswagen and the IG Metall union in Germany to negotiate with management on day-to-day working matters at the plant. There was, however, considerable opposition from US business groups and Republican politicians.[31][32][33] However, the United Auto Workers was successful in winning a vote to establish a bargaining unit in 2016.

The UAW again attempted to unionize the plant in June 2019. This failed by a 52 to 48 percent margin.[34]

Overview timeline
  • 1988: Volkswagen closes its Westmoreland Assembly Plant[10]
  • 2006: Construction completed for the Interstate 75 interchange near Ooltewah, Tennessee.[19]
  • July 2008: Volkswagen announces its intention to build the Chattanooga Assembly Plant.[12]
  • Fall 2008: Preliminary construction begins.[19]
  • January 2009: January groundbreaking re-scheduled indefinitely.
  • May 2009: Ceremonial "Wall-Raising" (vs. groundbreaking).[16][35]
  • October 2010: CSX and Norfolk Southern Railway announced they would again serve the site following the completion of a $6.6 million project to provide dual rail service to the Volkswagen Assembly Plant.[36] The newly completed yard was dedicated on April 6, 2011. Work included "the biggest rail overhaul in and around the Volunteer Army Ammunition Plant since the tracks were laid during World War II."[37]
  • April 18, 2011: First Passat rolls off the assembly line.[14][38]
  • April 2011: Completion of the site's $7.5 million 850-foot span steel-and-glass pedestrian bridge and guardhouse.[22]
  • May 24, 2011: The plant was inaugurated on May 24, 2011, by Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft and the U.S. Secretary of Transportation Ray LaHood[3] with Klaus Scharioth, German Ambassador to the United States, Bill Haslam, Governor of Tennessee, Jonathan Browning, President and CEO of Volkswagen Group of America, as well as U.S. Senators Bob Corker and Lamar Alexander in attendance. The actor Max Page, who played a small version of Darth Vader in a 2011 Volkswagen television commercial, also attended in costume.[39][40]
  • September 8, 2011: The plant manufactured its 10,000th car, a white Passat TDI. The number included pre-series cars, technical training cars, dealer experience cars as well as customer cars.[41]
  • November 2011: The Passat is named the 2012 Motor Trend Car of the Year.[42]
  • December 2011: The plant became the first auto plant in the world to receive an LEED platinum certification.[43]
  • February 7, 2012: The plant manufactured its 50,000th Passat.[14]
  • May 2012: The plant manufactured its 100,000th Passat.[44]
  • May 24, 2013: The plant manufactured its 250,000th Passat.[45]
  • December 14, 2016: The plant starts series production of the Volkswagen Atlas.[46]
  • January 14, 2019: VW announces at the Detroit Auto Show that the plant will begin building the ID. Crozz crossover and the ID. Buzz van, a reimagining of the iconic van of the 1960s and 70s, in 2022.[6]

References
  1. Pare, Mike (March 31, 2010). "Sen. Alexander calls VW, Chattanooga an 'ideal marriage'". Chattanooga Times Free Press. Retrieved April 22, 2010.
  2. Pare, Mike (September 11, 2009). "Kisber says VW plant will pay off". Chattanooga Times Free Press. Retrieved April 22, 2010.
  3. "Volkswagen Inaugurates New Plant in Chattanooga, Tennessee" (Press release). Volkswagen. May 24, 2011. Archived from the original on July 29, 2011. Retrieved July 16, 2011.
  4. Siler, Steve (October 27, 2016). "2018 Volkswagen Atlas: VW's Three-Row SUV for America Finally Arrives". Car and Driver.
  5. Tahaney, Ed (October 28, 2016). "First Look: 2018 Volkswagen Atlas". automobilemag.com. Retrieved August 11, 2020.
  6. Ohnsman, Alan (January 14, 2019). "More Buzz for Dixie: Volkswagen investing $800 million for electric SUV assembly in Tennessee". Forbes. Retrieved August 22, 2019.
  7. Pare, Mike (July 12, 2019). "Volkswagen-Ford tie-up makes stronger case for Chattanooga electric vehicle plant". Chattanooga Times Free Press. Retrieved August 22, 2019.
  8. "Volkswagen sees US plant as key to topping Toyota". Reuters, May 25, 2011, Deepa Seetharaman. Archived from the original on May 30, 2011.
  9. "VW opens Tennessee plant with new focus on quality". LA Times, May 28, 2011, Jerry Hirsch. May 28, 2011.
  10. "Volkswagen's Chattanooga Plant Open For Business". The Truth About Cars, Bertel Schmitt, May 25, 2011.
  11. Ludwig, Christopher (May 24, 2016). "Supply Chain Conference: Mexican and intermodal shockwaves". Automotive Logistics. Retrieved May 13, 2017. Volkswagen's plant in Chattanooga, for example, currently receives 87% of transport material from the US and Canada, with 6% from Mexico and 7% from overseas.
  12. "From Deseret News archives: Volkswagen building Tennessee assembly plant during hard times". Deseret News, Nov 27, 2008.
  13. "Volkswagen sees U.S. plant as key to unseating Toyota". Chicago Tribune, May 24, 2011, Deepa Seetharaman.
  14. "Volkswagen Chattanooga Builds 100,000th Car". WTVC NewsChannel 9. May 2012. Archived from the original on November 9, 2012.
  15. "To Become No. 1, Volkswagen Needs to Succeed in Chattanooga". Edmunds, Bill Visnic, December 6, 2010.
  16. Pare, Mike (January 3, 2009). "Chattanooga: VW shifts initial work to March". Chattanooga Times Free Press.
  17. ""The Hidden Jewel" of Enterprise South". News Channel 19, Carl Sneed, December 23, 2008. Archived from the original on May 22, 2011.
  18. "Industrial prizes fill Chattanooga parks". Rome News-Tribune, Dave Flessner , Chattanooga Times Free Press. Archived from the original on July 22, 2011.
  19. "Chattanooga: Making connections for Volkswagen plant site". The Times Free Press, Dave Flessner, July 19, 2008. Archived from the original on July 24, 2011.
  20. "VW CEO: Volkswagen delivered on new Chattanooga plant". The Times Free Press, Mike Pare, May 25, 2011.
  21. "Volunteer Army Ammunition Plant". Global Security.
  22. Pare, Mike (March 1, 2011). "Completion of bridge to mark Volkswagen milestone in Chattanooga". Chattanooga Times Free Press.
  23. "Unique approach to groundbreaking on Volkswagen Drive". WRCBTV.com, September 10, 2010.
  24. Secrets of the Superfactories (TV documentary, 2019)
  25. "Volkswagen Passat Named Motor Trend 2012 Car of the Year". Motor Trend. Retrieved November 16, 2011.
  26. "Volkswagen Chattanooga Factory Earns LEED Platinum Certification". Chattanoogan.com. Retrieved December 7, 2011.
  27. Hickman, Lizzie (August 1, 2019). "Business Trend: Chattanooga goes solar". Chattanooga Times Free Press.
  28. "Volkswagen Selects Engineering & Architecture Firm for Chattanooga Facility". The Dallas News, Associated Press, May 24, 2011, Kristin M. Hall.
  29. "Volkswagen Chattanooga Selects Port of Savannah". Best Shipping News.
  30. "VW Came for the Incentives – And Response". Chicago Tribune August 29, 2008 via Chattanoogan.com, Jan 27, 2009. Archived from the original on January 19, 2013.
  31. Barrett, Paul M (February 17, 2014). "UAW's Devastating Defeat in Tennessee: Four Blunt Points". www.bloomberg.com. Retrieved August 11, 2020.
  32. Bachman, Justin (February 18, 2014). "How Volkswagen's Tennessee Plant Could End Up Organized Without the UAW". www.bloomberg.com. Retrieved August 11, 2020.
  33. Boudette, Neal E. (February 15, 2014). "Union Suffers Big Loss at Tennessee VW Plant" – via www.wsj.com.
  34. Allyn, Bobby (June 15, 2019). "Tennessee Workers Reject Union At Volkswagen Plant — Again". NPR. Washington, D.C. Retrieved June 16, 2019.
  35. Pare, Mike (May 17, 2009). "Chattanooga: Passing lane in progress". Chattanooga Times Free Press.
  36. $6.6 Million Project Set To Complete Dual Rail Service For Volkswagen Archived October 18, 2010, at the Wayback Machine. chattanoogan.com, October 14, 2010. Retrieved November 22, 2015
  37. "VW dedicates rail yard". timesfreepress.com.
  38. Marcum, Ed (May 25, 2011). "Chattanooga Volkswagen plant up and running, making fuel-efficient Passat model". Knoxville News Sentinel.
  39. "Tiny Darth Vader brings The Force to VW's Chattanooga plant". Autoblog.com, Jonathon Ramesey, May 25, 2011.
  40. Woodyard, Chris (May 24, 2011). "Pint-sized Darth Vader blesses Volkswagen's U.S. factory". USA Today. Retrieved May 24, 2011.
  41. "Volkswagen Chattanooga Builds 10,000th Car". News Channel 19 Chattanooga. September 8, 2011.
  42. "Volkswagen Passat Named Motor Trend 2012 Car of the Year". Motor Trend. Retrieved November 16, 2011.
  43. "Volkswagen Chattanooga Factory Earns LEED Platinum Certification". Chattanoogan.com. December 1, 2011. Retrieved December 7, 2011.
  44. "Volkswagen Chattanooga Builds 100,000th Car". Volkswagen. May 5, 2012. Archived from the original on November 9, 2012.
  45. Mihalascu, Dan (May 25, 2013). "VW Celebrates Production of 250,000th Passat at Chattanooga Plant". Retrieved July 21, 2014.
  46. VOLKSWAGEN CHATTANOOGA STARTS SERIES PRODUCTION OF THE 2018 VOLKSWAGEN ATLAS. Media Site of the Volkswagen of America, Inc. Archived December 17, 2016, at the Wayback Machine
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