Volkswagen AG said Thursday it will create 800 more jobs at its only U.S. plant to ramp up production of the Passat sedan. Meanwhile, the United Auto Workers has launched a drive to unionize workers at the plant.
The new hires at the Chattanooga plant come in addition to 200 new jobs added at the plant earlier this year. The plant currently employs about 2,200 Volkswagen workers and an additional 500 who work for a contract firm called Aerotek.
The German automaker came to town with a promise to hire 2,000 people and Thursday's announcement has pushed that figure past 3,000. The hires will let Volkswagen run the plant -- which recently made its 50,000th car -- 10 hours a day, six days a week.
Volkswagen's $1 billion investment in its Chattanooga plant, which opened last spring, has put the company closer to the American consumer. One in every four Volkswagens sold in the U.S. are Passats made in Chattanooga.
The Chattanooga plant's additional production will bring its annual capacity to 170,000 vehicles, up about 20,000 from current capacity. The plant produced about 40,000 Passats in 2011.
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Volkswagen joins automakers boosting production and hiring at plants as demand for new cars grows.
Last year, automotive sales in the U.S. grew 11 percent, while Volkswagen sales in the U.S. increased by 26 percent. In February, sales of the Volkswagen brand rose almost 43 percent to 30,577 vehicles -- its best February since 1973.
Quite plainly, we need more Passats to meet the market demand, said Jonathan Browning, head of Volkswagen operations in North America.
Other car makers are boosting their U.S. production capacity. Daimler Trucks North America, the U.S. truck division of Mercedes-Benz, will hire 1,100 workers this year to ramp up production at its Freightliner truck factory in Cleveland, N.C.
BMW AG (FRA:BMW) plans to hire 300 workers in 2012 at the Spartanburg, S.C. factory where it builds sport utility vehicles.
Ford Motor Company (NYSE:F) said it would add about 5,500 jobs this year, while Chrysler Group aims to boost employment at its factories in Detroit by 1,250 positions.
UAW Faces Uncertain Future
The United Auto Workers, or UAW, is soliciting signatures of support from workers at Volkswagen's Chattanooga plant, Reuters reported.
The UAW's membership has fallen 75 percent in the past three decades, and it started dipping into its strike fund in 2006.
According to U.S. labor law, a union must collect signature cards from at least 30 percent of the workers at a plant to hold a representation election.
However, not many workers at the Chattanooga plant want a union, Reuters said, citing one worker who attended a closed-door meeting with Volkswagen executives.
Newly hired workers earn $14.50 an hour at the Chattanooga plant. That is just below the $14.78 a new hire would make at a unionized General Motors plant in Spring Hill, Tennessee.
The UAW has been struggling to succeed in organizing foreign car makers, especially in the southern United States.
Its push to organize Toyota's flagship U.S. factory in Georgetown, Kentucky fell apart in 2007. The union also failed on four separate votes going back to 1989 to win support for a union at a major Nissan factory in Tennessee.
Volkswagen AG shares closed up 1.77 percent, to $32.70 a share in Thursday's trading.