Surging Demand for Passat Spurs Volkswagen to Add 800 Jobs in Tennessee

March 22, 2012
Since Volkswagen introduced the 2012 Passat late last year, sales have been booming. February sales of the sedan hit their highest level in nearly a decade.

Germany's Volkswagen AG (IW 1000/10) said it will add 800 workers to its assembly plant in Chattanooga, Tenn., to ramp up production of its popular Passat sedan.

"Quite plainly, we need more Passats to meet the market demand, and I'm glad that we can respond so quickly by adding staff in Chattanooga," said Jonathan Browning, president and CEO of Volkswagen Group of America Inc.

Including Volkswagen's announcement earlier this year that it will add 200 new jobs at the Chattanooga facility, the automaker will add 1,000 workers to the plant this year.

The Chattanooga currently employs more than 2,700 people -- about 2,200 by Volkswagen and an additional 500 by Aerotek, the company's staffing partner.

Since Volkswagen introduced the 2012 Passat late last year, sales have been booming. The automaker sold 8,189 units in February, marking the Passat's biggest month since August 2003, when it sold 8,373 units, according to noted that the Passat's average days to turn -- which measures the amount of time a car sits on a dealer lot before it's sold -- was 55% lower than the industry average in the midsize segment in February (24 days versus 54 days), "suggesting much stronger demand for the vehicle than for most of its competitors."

"For now, at least, this extra production will absorb the Passat's jump in demand in the U.S.," said senior analyst Michelle Krebs. "But further down the line, Volkswagen will need to produce even more vehicles in the U.S. to expand its product offerings -- a small crossover, for instance -- and meet its lofty sales goals."

Volkswagen has said that its goal is to sell 800,000 vehicles annually in the United States by 2018. To meet that mark, projects that the automaker will need to grow its U.S. sales by an average of 13.8% each year through 2018.

Volkswagen noted that its Chattanooga plant has been working daily overtime to meet the demand for the Passat. The addition of a third team of workers will enable the plant to boost capacity and reduce overtime for existing associates, the automaker said.

"This is a clear sign that the plant ramp-up has been successful and is a validation that the Passat is of the highest quality," said Frank Fischer, CEO and chairman of Volkswagen Chattanooga. "Our plant was designed to be flexible in order to respond to market demand and I'm proud that we've achieved this so quickly.

"This is a good day for Volkswagen and for the people of Chattanooga."

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