This story was updated Wednesday, May 18, 2022, at 11 p.m. with more information.
Volkswagen Chattanooga, prepping to build its first electric vehicles this summer, unveiled Wednesday a $3,000 bonus for all production and maintenance employees amid the tight job market.
Also, the automaker is offering a $3,000 signing bonus to new production workers hired through Oct. 31 as the company aims to bring on about 1,000 more employees before year's end.
"We intend to be the top manufacturing employer in the area," Volkwagen Chattanooga President of Human Resources Burkhard Ulrich said at a news conference. "The appreciation bonus for our production and maintenance team members is well deserved."
Ulrich said the plant is on track for the start of assembly of its ID.4 electric SUV the last week of July, which he termed "a clear testament to our team's dedication."
He said while the job market is tough, he's confident VW will meet its employee-hiring targets.
VW plans to add a third shift to its Chattanooga operations in October to meet customer demand for the Volkswagen Atlas and Atlas Cross Sport SUVs, which are currently built at the factory, and the ID.4.
VW became the No. 2 seller of electric vehicles in the United States last year with its ID.4, which is now imported from Germany, and other electric vehicles, trailing leader Tesla, according to the company.
VW Chattanooga shifts
Assembly Shop, Paint, Battery, Logistics
Monday-Friday: Days, 6 a.m.-3:45 p.m.; nights, 6 p.m.-3:45 a.m.
Monday-Friday: 1st shift, 6 a.m.-2:30 p.m.; 2nd shift, 2 p.m.-10:30 p.m.; 3rd shift, 10 p.m.-6:30 a.m.
The new hires are expect to put the factory's headcount in Chattanooga at between 4,500 and 5,000 employees.
In addition to a $3,000 signing bonus, candidates who relocate to join Volkswagen's production team will be eligible for a $2,500 stipend. Stipend eligibility is based on IRS regulations, the company said.
"As we grow our team to help meet customer demand and implement a third shift, we believe the signing bonus and relocation stipend will help us become an even more attractive employer in the region," said Ulrich.
He said the company also increased its employee referral incentive from $300 to $500.
"For us, this was an easy decision," Ulrich said. "Some of our best hires have been referred by our team members."
The company said it's hiring production team members primarily for second, third and night shifts. The starting hourly rate for those shifts is $24.40, which includes shift premium and perfect attendance bonus, according to VW.
With wage progression, top-out rates can reach $33 per hour, the company said. Direct hire positions are for those with relevant experience, VW officials said.
Amanda Plecas, head of communications at VW Chattanooga, said in an interview that a job fair at the plant Saturday drew from 900 to 1,000 people. About 500 applied at the time and then a couple hundred more did so online after the event, she said.
Chattanooga production of the ID.4 comes after the company completed an $800 million expansion at the factory.
Scott Keogh, Volkswagen Group of America's chief executive, said in a virtual roundtable with journalists earlier in the year that other electric SUVs are expected after 2026 in North America. Also, the company is studying whether to produce an electric truck for the U.S. market, and there's a chance the ID.Buzz, the electric version of the iconic Microbus, could be built in the U.S., depending on sales.
Volkswagen recently announced plans to spend $7.1 billion in North America to boost its product lineup, carry out more research and develop and bolster production in the region. VW is targeting 55% of all its sales in the U.S to be fully electric by 2030.
Keogh said ID.4 production capacity in Chattanooga is from 100,000-120,000 units per year. That figure, coupled with existing demand for the Atlas and Atlas Cross Sport, would maximize the Chattanooga plant, the VW official said. But he said the company is overwhelmed with demand for the ID.4.
Last month, a report from a German magazine said Volkswagen is looking at building a second plant in the United States, and it could sit next to its existing Chattanooga factory.
Last week, Volkswagen Group announced it plans to electrify the Scout brand to form an independent company to design, engineer and manufacture pickups and rugged SUVs for the American market.
The start of production is planned for 2026 in the United States at a location that wasn't stated in a news release.