A Passat is parked at the main entrance to the Volkswagen manufacturing plant on Thursday, June 16, 2016, in Chattanooga, Tenn.SIX MONTH SALES
VW model, U.S. sales and percent change in 2016 from a year ago:* Passat - 32,813, down 22.2 percent* Golf - 26,322, down 14.3 percent* Jetta - 58,279, down 13 percent* Beetle - 6,773, down 48.3 percent* Eos - 387, down 71.2 percent* CC - 1,681, down 45.4 percent* Tiguan - 20,556, up 50.3 percent* Touareg - 2,203, down 33.4 percent* Total - 149,014, down 14.5 percentSource: Volkswagen of America
EMPLOYEE TIMELINE
Workers at VW’s Chattanooga plant over the years:* July 2008 - VW picks Chattanooga for auto assembly plant and plans to hire 2,000 workers.* March 2012 - VW announces plans to hire 800 more workers, which would put plant headcount at about 3,500 employees.* April 2013 - VW announces staffing contractor Aerotek will cut about 500 jobs due to slower than expect Passat sales, putting the plant at some 2,700 workers.* July 2014 - VW unveils $900 million plant expansion with plans to add 2,000 jobs to the 2,400 employees at the factory.* September 2016 - Plant plans to add about 1,100 workers by mid-April 2017, which would put headcount at about 3,400.Source: Volkswagen, Chamber of Commerce
Americans will like the new sport utility vehicle that workers at Chattanooga's Volkswagen plant will assemble later this year because the German automaker designed it with the United States market in mind, according to those working to bring the SUV to dealerships in 2017.
"This one is American," says Mario Duarte, the plant's senior manager of organizational development and human resources. "It was baby steps with the Passat. This is a big step."
Duarte is helping to lead the effort at the plant to bring on 1,100 more employees through mid-April to produce the new SUV, as well as the existing Passat midsize sedan. The factory is on its way to employing the most workers since VW started production here about five years ago.
The company, through contract staffing firm Aerotek, plans to put the plant's headcount at about 3,400 by spring. That's a welcome sight, says Bill Kilbride, the Chattanooga Area Chamber of Commerce's chief executive.
"Hallelujah," he says, adding that automotive suppliers to the plant locally are hiring as well. "When the tide rises "
The long-awaited SUV is seen as an alternative to vehicles such as the Ford Explorer, Honda Pilot and Toyota Highlander. It's based on the CrossBlue concept that VW unveiled in early 2013, but failed to get the green light from Germany to produce until mid-2014, when a $900 million plant expansion was unveiled. The expansion also called for the eventual hiring of 2,000 more workers.
Plant spokesman Scott Wilson says expansion construction at the factory is basically complete. Equipment installation is done in the body and assembly shops, he says.
"The production schedule is unchanged for the midsize SUV, with start of production in late December for a market introduction in the second quarter of 2017," Wilson says.
Since the Chattanooga plant began assembly in early 2011, it has produced just the Passat, for which sales have flagged amid the diesel emission scandal and a shift by buyers to SUVs and trucks.
Karl Brauer, senior director of insights for Kelley Blue Book, says the recently refreshed version of the Passat, along with the new SUV, will help drive VW sales moving ahead.
"Both of those will help tremendously," he says.
Brauer expects VW will promote the SUV "pretty aggressively" with marketing dollars.
"They know that's the type of vehicle that will turn things around," he says. "That's going to be the basis of the turnaround."
Alan Brown, a Texas VW dealer who heads the brand's dealer council in the U.S., says the SUV will be "the right product at the right time at the right price."
"I feel great about it," Brown says about the SUV, which he and other dealers saw in Chattanooga earlier this year.
Jesse Toprak, chief executive of the auto research site carhub.com, says the midsize SUV, along with a revamped Tiguan small SUV, will give "a much needed boost" to VW sales.
"The SUV is a strong segment right now," he says. "It's the best performing segment in the industry. Luckily, for a change, VW will have the right product that appeals to the market."
Toprak says company officials hope the new products will help the automaker regain sales losses it experienced over the past year.
VW officials also say the new three-row, Chattanooga-made SUV, which seats seven, will be priced competitively with others in the U.S. market.
Charles Wood, the Chattanooga Chamber's vice president for economic development, says that while the production of the midsize SUV has been a long time coming, he's excited to see it close to fruition.
"It will be critical," he says. "For us, it's going to be really important."
Wood says the SUV market is humming, noting that his family owns two of the vehicles.
"It's a new market opportunity for dealers," he says. Relatively low gas prices also should help boost sales, Wood says.
Meanwhile, more SUVs could be on the way for the German automaker. The company has revealed a CrossBlue Coupe, which could be made in Chattanooga.
Additionally, parts suppliers to VW in the region also have been increasing jobs as SUV production ramps up.
Chattanooga Seating Systems has announced it will expand its existing facility at the VW supplier park adjacent to the plant and create 190 new jobs. The company will more than double its existing employee headcount of 148 full-time workers, officials say.
Company spokesman Scott Worden says the majority of the posts will be hourly positions such as production, material handlers, quality inspectors and maintenance technicians. But, he says, some jobs will be salaried positions such as production supervisors, human resources managers, engineers, and finance personnel.
The company, a joint venture of Magna Seating and Hollingsworth Logistics, will make a $5.4 million investment in new equipment for its facilities, Worden says.
The biggest new investment by a supplier locally is by Spain-based Gestamp, which is investing $180 million and adding 510 jobs to the 300 it already had in Chattanooga.
The largest single investment ever by a VW supplier in Hamilton County, Gestamp built a new plant near VW's supplier park and expanded its existing facility nearby on Hickory Valley Road in Enterprise South industrial park.
Also, Gestamp purchased the the vacant Farley's & Sathers candy plant in Chattanooga, where it renovated the facility and installed a chassis production location for the new SUV.
When Chattanooga's VW plant started Passat production in 2011, the vehicle sold well and the plant produced 150,000 vehicles in 2012, according to the automaker. In March 2012, VW announced it planned to hire 800 more employees to meet expected demand for the Passat.
That would have pushed the factory's workforce to 3,500, but sales for the sedan fell off and the company's contract supplier announced about a year later that 500 employees would be laid off, putting the headcount at about 2,700 workers.
In addition to building the SUV, the company has designed a VW national engineering and planning center for Chattanooga. Aimed at helping develop current and future models, at least 200 engineers are eventually slated to man that facility.