Volkswagen has no plans to cut jobs at its Chattanooga plant due to the company's ongoing diesel emissions scandal as the factory remains on pace to make a new sport utility vehicle around year's end, the automaker said Tuesday.
"We have not cut any jobs, nor have we changed any schedules," said plant spokesman Scott Wilson. "There are no plans to do so."
The latest comments from the factory come as the German carmaker's top labor official said Tuesday that VW may have to cut jobs in the United States as well as Europe and other countries depending on how big a fine has to be paid for its manipulation of diesel emissions tests.
The extent to which VW may be forced to cut jobs to help meet the costs of 'Dieselgate' depends "decisively" on the level of fines, VW's works councils chairman Bernd Osterloh said. He spoke at a meeting of workers in Wolfsburg, Germany, which was also attended by the carmaker's top managers, according to Reuters.
"Should the future viability of Volkswagen be endangered by an unprecedented financial penalty, this will have dramatic social consequences," said Osterloh, who also sits on VW's 20-member supervisory board.
Wilson said the plant now employs 2,500 people as VW spends more than $600 million at the Chattanooga factory to ramp up for production of the new midsize SUV on which company officials are pinning hopes for a sales rebound.
When VW announced the expansion in mid-2014, it planned to eventually add 2,000 jobs to the 2,400 assembling the Passat sedan.
But Volkswagen's biggest-ever corporate scandal exploded last September when it was revealed the company installed so-called defeat devices in the software of up to 11 million diesel vehicles worldwide to evade government emission tests. More than 500,000 vehicles in the U.S. are involved, including models of the Chattanooga-made Passat.
The company has set aside $7.3 billion for the scandal, but it faces much more in fines, penalties and lawsuit settlement costs. Volkswagen also has been unable to sell the diesel versions of the 2016 Passat. Diesel engines previously comprised nearly 30 percent of Passat's sales in the United States.
Mike Randle, publisher of Southern Business & Development magazine, said the new SUV will be "a real, real important" vehicle for the company in the U.S.
"They have got to get this SUV lined up and running as quickly as they can," he said.
The Volkswagen brand's sales tumbled 13.2 percent in February over a year ago. Passat sales were off more than 30 percent.
Still, VW suppliers in the area which are building new plants continue to do so with plans to hire hundreds of more workers to help provide parts for the SUV and other automakers in the region.
Gestamp and Yanfeng each held job fairs late last month to recruit employees. Shanghai, China-based Yangeng is spending $55 million to create a new Chattanooga interiors plant at which it eventually plans to hire 350 workers. Spanish supplier Gestamp is building two new plants and adding onto an existing facility in a $180 million project.
VW, Europe's largest automaker, employs over 600,000 people at around 120 factories worldwide, including 270,000 in Germany.
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.