Volkswagen Chattanooga Assembly Plant


The Volkswagen Chattanooga Assembly Plant 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 in April 2011 prior to being formally inaugurated in May 2011. The plant began production in April 2011 with a version of the 2012 Volkswagen Passat NMS, tailored to the US market, and has a projected annual production of 150,000 cars. Production of the Volkswagen Atlas commenced in 2017. 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.

Background

The local plant, building a localized product, allows Volkswagen to avoid exchange rate fluctuations, monitor US automotive market trends,
and potentially reduce vulnerability to extended supply chain issues. At its outset, Chattanooga Assembly manufactured 85% of the Passat's content, and about 85% of the content of the North American Passat comes from North American Free Trade Agreement countries. The company initially had plans for an expansion that would increase capacity to 592,000 vehicles a year. 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. As of late 2012, cars manufactured at the Chattanooga Assembly Plant have been exported to Mexico, Canada, South Korea, and the Middle East.
The Chattanooga plant opened 23 years after the closing of the Westmoreland Assembly Plant near New Stanton, Pennsylvania, in 1988. The 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.

Site

The entire facility includes approximately, and is constructed on a parcel of the Enterprise South Industrial Park in eastern Chattanooga.
The industrial park comprises land that was once an ammunition plant known as the Volunteer Army Ammunition Plant, which manufactured up to of TNT per month during World War II, the Korean War, and the Vietnam War. The Volkswagen facility is near a remaining storage area containg storage bunkers once used to store TNT. The site features nearby hiking, biking and walking trails, picnic areas, and overlooks, known as the Enterprise South Nature Park.

Design

The Volkswagen Chattanooga Assembly Plant includes a body shop, paint shop, assembly facility, a Market Delivery Options building, technical testing center, employee training facility with classrooms, an apprentice-training school and a full-size practice paint booth, a supplier park for eight companies, and a healthcare center with a gym, childcare facilities, and medical services.
The plant has the flexibility to build any of the company's front-engine/front-wheel-drive vehicles in A, B, or C-segments. The rolling-dip paint shop is sized to handle a wide range of vehicle sizes. The plant is not designed to manufacture large vehicles. 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. 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. The body assembly line uses diode lasers.
VW announced it would seek Leadership in Energy and Environmental Design certification for the complex. In November 2011, VW announced that the 2012 model of the Passat was named the 2012 Motor Trend Car of the Year. In December 2011, the Assembly Plant became the first auto plant in the world to get the LEED platinum certification. A 9.5 megawatt solar park supplies 13 GWh of electricity per year; 12% of plant consumption.
The Volkswagen Chattanooga Assembly Plant was designed by the Nashville engineering and architecture firm SSOE, the firm Environmental Resources Management for the environmental permitting process, and Alberici Constructors, Inc. for the construction management of the facility. The Port of Savannah, Georgia's Garden City Terminal handles imported auto parts in containers for the plant.

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. 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. Volkswagen had researched 398 possible sites before narrowing the choice to the states of Michigan, Alabama, and Tennessee.

Work council and labor unions

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. 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.

Overview timeline