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VW expanding in Chattanooga, hiring workers ahead of SUV production

Hey, look! We're writing about Volkswagen's Chattanooga, TN factory and the focus isn't on yet another unionization effort. That's because the big news at the still-new factory is VW's plan to expand and increase its workforce in preparation for the arrival of the German brand's long-awaited midsize crossover. The expansion, which will add over half a million square feet of factory space, overhaul the assembly, body and paint shop and add 2,000 employees to the factory's ranks, officially kicked off last month. "This is a very exciting time in the history of Volkswagen Chattanooga," president and CEO of operations at the plant, Christian Koch, said in a statement. "A lot of hard work is going into adding this second vehicle line to the plant, but it is crucial to our efforts to move forward in America." "Not only will Volkswagen's expansion create thousands of new jobs, it will strengthen their roots in our city," Chattanooga's Mayor, Andy Berke, said in a statement. "From the construction at the plant to the development of a visitors center, there is no doubt that Volkswagen is invested in Chattanooga." VW Chattanooga has been a constant in the headlines over the past few years as pro-union and pro-business interests have battled over the souls representation rights of its roughly 1,500 workers. Just over a year ago, the UAW was defeated in its initial unionization bid, although pro-labor interests have not gone quietly into the night. Construction is expected to continue for two years, with production of Chattanooga's second vehicle expected to commence in 2016. Scroll down for the official press release from Volkswagen. VOLKSWAGEN CHATTANOOGA'S PLANT EXPANSION UNDERWAY Feb 24, 2015 Construction Will Add 2nd Vehicle Line: New Midsize SUV CHATTANOOGA, Tenn. (Feb. 24, 2015) - Construction is underway at the Volkswagen Chattanooga manufacturing facility in preparation for production of an all new Midsize SUV. The first phase of construction started in early January 2015 and will continue for the next two years. Volkswagen Chattanooga CEO and President Christian Koch gave a site tour to Chattanooga Mayor Andy Berke and Hamilton County Mayor Jim Coppinger on Tuesday, highlighting the necessary expansion of the production areas in the body shop, paint shop and assembly areas.

VW outsells GM in China for first time in 8 years

In case you didn't know, Volkswagen is hell-bent on becoming the largest automaker in the world. The German carmaker has inched closer to that goal, having outsold General Motors in China last quarter for the first time in eight years.
Volkswagen's sales in China, its largest marker, increased by 21 percent last quarter to 704,991 units. Those numbers almost tripled GM's third-quarter growth, and were enough to beat out the American automaker's 664,765 sales. GM, however, still leads in year-to-date sales in China by a slim margin of around 77,000 units. The Asian nation also happens to be GM's largest market, and according to the report in Automotive News, China's car market may grow to be larger than the US, Japan and Germany combined in three years' time.
About the news his company was bested in China by VW last quarter, GM CEO Dan Akerson is quoted saying, "It's not whether you're the biggest car manufacturer. It's whether you want to be the most profitable." It should be noted of these figures that GM includes truck figures, yet excludes Hong Kong and Macau from its Chinese sales numbers, while VW does just the opposite. Through September of this year, Volkswagen had 5 of the 10 best selling vehicles in China. GM boasted three of the cars on that list.

VW to relax ambitious US sales targets?

The Volkswagen brand sold 407,704 cars last year, a 6.95-percent decline compared to 2012, and it's down a further 8.36 percent through the end of April 2014 compared to this time last year. In order to to put the sales football between its Strategy 2018 goal posts, the brand would need to add 100,000 more sales every year to achieve the lofty 800,000-unit target. Coming to grips with how unreasonable that is, VW US CEO Michael Horn has said, "For now, we have to have realistic targets."
The reasons for the brand's slow-down are imprecise, but lots of folks are throwing lots of reasons around. Last November, VW Group Chairman Ferdinand Piech told Bloomberg, "We understand Europe, we understand China and we understand Brazil, [but] we only understand the US to a certain degree so far." Analysts say the brand hasn't had midsize and compact SUV offerings, especially an overdue retail version of the CrossBlue, and the ones it does have are priced too high for their segments. It "didn't introduce enough new engines, or alternative technologies or model variants" for the Passat and Jetta. It devoted so many resources to China that the US market suffered. It was being outspent two-to-one on advertising by competitors. Its J.D. Power dependability ratings aren't high enough to overcome its past. It "has never really taken the US customer seriously." And so on.
There's still no official admission of defeat concerning the target, but reading between the lines there are some VW execs that appear to accept it won't happen short of some deus ex machina. Still,