VW Passat Sales Fall Short, 500 Layoffs Result
Production is outpacing demand at Volkswagen’s first U.S. manufacturing plant since 1988, prompting the brand to cut 500 contract jobs.
“We had too high expectations,” Frank Fischer, the head of Volkswagen’s Chattanooga operations, told the Chattanooga Times Free Press. “The pipeline is over-full from the facility to the dealers.”
Sales for the American-focused sedan are still extraordinary compared to 2011. Just under 26,000 sold that year, and the brand is already on pace to pass that figure by month’s end. Last year 117,023 units found homes. But sales aren’t keeping up with the facility’s ambitious current rate, which would produce 170,000 units annually.
That schedule sees production running two 10-hour shifts from Monday to Saturday with three teams. Volkswagen plans to reduce that to two teams saddled with two 10-hour shifts from Monday to Thursday.
Layoffs at the plant will be complete by June 30, reducing the workforce from about 3,200 to roughly 2,700.
Ballooning sales numbers in 2012 can be attributed both to the car’s domestic production and the brand’s choice to offer a different model tailored to the North American market.
[Source: Automotive News]
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Luke is an energetic automotive journalist who spends his time covering industry news and crawling the internet for the latest breaking story. When he isn't in the office, Luke can be found obsessively browsing used car listings, drinking scotch at his favorite bar and dreaming of what to drive next, though the list grows a lot faster than his bank account. He's always on <A title="@lukevandezande on Twitter" href="http://twitter.com/lukevandezande">Twitter</A> looking for a good car conversation. Find Luke on <A title="@lukevandezande on Twitter" href="http://twitter.com/lukevandezande">Twitter</A> and <A title="Luke on Google+" href="http://plus.google.com/112531385961538774338?rel=author">Google+</A>.
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The passat is competing in a market already dominated and defined by the accord and camry, both of which have stellar reputations for reliability. So, VW needs to at least provide a reliability baseline that meets that of the aforementioned and then provide value-added appeal not offered by the others ... e.g. sporty variants. These criteria have not been met nor is the passat that much different in size than the jetta. If VW really wants to make inroads, then provide vehicles that do not compete with the established until such factors as reliability exceed those of the established. Instead offer what you do best in Europe ... polo variants, TDI tiguan, scirocco, upgraded jetta, GTD, all of which no parallels in NA, particularly so when offered with performance elements such as manual transmissions. VW has already established itself as a somewhat sporty brand, why does it not capitalize upon that venue? Instead it erodes its credentials through, for example, short sighted performance downgrades to the jetta, a vehicle that was really beginning to define its segment.
So they first boasted that they were built in the USA, bringing jobs and so on. But now they are part of the problem because of their ambitious goals and poor planning. So they over produced and then let over 500 people on the street. Shame on them!