Chattanooga: VW’s Next Stand

Posted on 12. Apr, 2012 by in Auto News

Chattanooga, Tennessee – Honda was not open the first foreign carmaker to an assembly plant in the U.S., but it was to remain the first.

In 1978, German car manufacturer Volkswagen converted an unfinished Chrysler plant in Westmoreland County, Pennsylvania, to build the rabbit, but like the prodigal Roanoke outpost in the Pre-Colonial Virginia, not the work.

Open a brand new plant in Chattanooga and now produces more than 600 trade per day, Volkswagen officials say they have learned from the painful lessons of Westmoreland. They have used that knowledge to a plant that they believe build a force in U.S. automobile for years to come.

Like Honda and other automakers plants have cut around the U.S., "we looked at our own experience [at Westmoreland] and we have other experiences, and then you know, if you look at the complexity of the project, we found our "own way, said Frank Fisher, CEO of Volkswagen Chattanooga operations.

Be a success in Chattanooga, VW saw its four pillars: product, engineering, parts and people.

"For each of these pillars," Fisher said, "we have our own approach, below what we experienced in Westmoreland, what other companies have done, and what we felt in our view, we should do."

While what happened to the Roanoke colony remains a mystery what happened in Westmoreland is not: broken all four VW pillars:

  • The product was defective. The rabbit had quality problems and "we Americanized the vehicle in a way that our customers do not like it at all," Fisher said.
  • The facility was designed not by VW. Instead of doing over again what it had to do VW, was built, there was an unused Chrysler plant with a structure already exists.
  • People were outsourced. VW hired ex-GM officials and "VW leadership perception that time," they know how to build cars, they will be able to start a factory and build cars here, '"Fisher said." It was some antagonism between the production guys, maybe the R & D guys at headquarters and in the system here. They are not very well together. "
  • At the end blew parts of the project. "The final charge came as the dollar was quite weak," said Fisher, "and the level of the parts that had to be imported, was much, much higher than in our (Chattanooga) project. Why was our project had a very strong focus on the localization of parts. "

The German car manufacturer was determined not to make the same mistakes with its plant in Chattanooga. If VW returned to the U.S., it was going to do things differently.

Meanwhile, in 2008, were officials of Chattanooga, Hamilton County, Tennessee, eager to take on a car manufacturer to find a facility.

While in Chattanooga, a "Rust Belt city of the South", had seen improvements since its industrial heyday, more work needed to be done.

"We have spent the last 40 years, some build ourselves out of the deep pit that we said in when Walter Cronkite told the world that we were the dirtiest city in the U.S. was 40 years ago, Chattanooga Mayor Ron Littleton.

"By improving the quality of life in mind, we feel a pretty good job of building the city again have done, but what it lacked a manufacturing center."

But the city and county had an ace in the hole for a heart transplant. Prime Site with a significant transport links and lots of open land Railroad tracks run near the airport is only a short distance away, and Interstate 75 – "one of the Main Streets of America", as Littleton called it – is not far from the place. In the mid-2000s, Toyota came calling, needs a home for a new assembly plant.

"If there was ever a classic site for heavy industrial investments, which was the site, and so that's what we had set up Toyota," Littleton said. "We were a little sure missed a down, but it turned out to be the best for us."

In 2006, the city's last major foundries had closed, idling "so people thought that was the end of heavy industry in Chattanooga" hundreds of workers, he said. To make matters worse, Toyota decided to pick a site in Mississippi instead.

It was not only the production, which is dried in Chattanooga. As in the rest of the country, the building was down. "Before VW showed up, I have spent the last 25 years in the construction industry in this area, and it was pretty bad," Dale Cross, a team leader said at the Volkswagen plant in Chattanooga. "Housing development ceased to exist, almost. Lot of people were looking for work, and I was one of them.

"As far as Chattanooga is at this time, we would lose business rather than gaining anything," said Cross.

So city and county officials approached Volkswagen at the 2008 North American International Auto Show in Detroit. One solved "fast and furious process," Littleton said. Until mid-2008 the decision was made to build there, and "as they say, the rest is history," he said.

For Volkswagen, the columns always right this time – building a permanent presence – was critical. When it came to product plans for the new U.S. version of the Passat were already underway before the system was started. During the launch of the new car is always a tricky proposition, VW has already drawn happy about the positive response of the trade by surprise.

"I think, frankly, the success we expected really with no one now," Fisher said. This success includes a number of awards from around the auto industry, including Cars.com 's Best of 2012 Award and the Motor Trend Car of the Year.

The system was designed to allow employees more efficient and the plant itself greener. The basics:

  • VW has made a $ 1 billion investment in the plant.
  • The facility is located on 1,400 acres northeast of downtown Chattanooga.
  • About 2,200 jobs were created when the facility opened, and another 800 jobs added.
  • As it sits now, the plant has a capacity for 150,000 Passat a year, but the footprint of the site can be doubled, allowing for more production if demand requires it.
  • It is a plant of "short distances", all manufacturing sectors come together in a smaller area, which means better and more frequent communication.
  • There is a focus on quality assurance, dedicated to parts of the plant audit to continuous improvements can be made. VW also receives feedback from consumers and retailers and works to quickly identify and resolve.
  • There are many aspects of the system that make it more environmentally friendly, these efforts the plant won the Leadership in Energy and Environmental Design Platinum certification in December 2011. It is the only auto manufacturing plant in the world to win this title, says VW.

In terms of people, VW wanted to accomplish a few things. First, they wanted good will with the community continues. By focusing its setting in Chattanooga, Hamilton County Officials saw a large, well-trained workforce here. Second, did the company representatives to ensure that the employees at the Volkswagen way that did not happen in Westmoreland were trained. Employees spend weeks in the VW Academy, before continuing on the plant floor.

It was not easy to get a job, but: 85,000 people applied for the 2,500 first orders.

"I did not really think I had a chance," said Curtis Wilson, a team leader in the plant. He had no automotive background. "I thought it would be a lot of people come from the north down here to work."

It was a little "like winning the lottery," Cross added.

As for parts, has VW up some suppliers on the factory grounds. Six hundred people are employed by suppliers and a much higher percentage of parts from the U.S., Volkswagen is less susceptible to currency fluctuations.

VW participates optimistic but cautious attitude about their future in Chattanooga, Fisher said.

"We want to go to a decision prior to the next," he said, "but given the success so far, I would really expect., A second model in the near future"

The Westmoreland experience has clearly VW get under his time in an effort to have this right. "The worst thing you can do in your life is to be arrogant and ignore facts," Fisher said. "As our CEO, says: Please always stay on the ground."

Littleton mayor, says he thinks VW is on the right track. "If the whole world stumbles again, we think that things really about as good as we had hoped.

"What's done is VW, a new heart, installed a new economic heart."

This story is part of a series on joint automobile production in the U.S. by Cars.com and USA Today.