Volkswagen's secret factory Posted 2011/02/08 @ 08:00 AM By Myles Kornblatt
Auto show press launches have several consistent themes. One of the easiest to recognize is European companies investing serious time telling everyone how they should feel about a car before unveiling it. Like a B-movie romantic seduction, the presentations usually start with the house lights turned low for an overzealous light and sound show that sets the mood. Volkswagen is no exception.
At the Detroit Auto Show this year VW was going for special old-school Americana to introduce the new American-built Passat. VW had a motion picture quality film of two cowboys meandering across the dusty plains of the Southwest. They were vaguely talking about an unbelievable change. Then these cowpokes meander over a ridge to reveal VW’s new plant in Chattanooga, Tennessee!
This corporate video highlights two very important things. First, VW seems to believe Americans don’t know their own geography. Although we may not be able to point out every country on the map, we do know something of our own terrain. This was evident as some of the Detroit crowd snickered when we were supposed to believe that the barren desert these cowboys were wandering through was the lush mountain area of Tennessee.
The second, and less obvious point, is that the cowboys had to say that, "This time it's for real." This suggests that Volkswagen may want us to dismiss that it already failed to build cars here -- twice.
The Volkswagen plant that people remember most was in New Stanton, Pennsylvania. VW purchased it from Chrysler in 1976. From 1978 to 1988 VW tried its hardest to be the first successful foreign car manufacturer to build in the US, but the chips were stacked against them. High production costs, increased small car competition, and the clash between the unions and the headstrong “Volkswagen Way”, combined to shrivel facility production.
But New Stanton was actually VW’s second failure in the United States. Few know that the company attempted U.S. production over twenty years before the Pennsylvania plant. Volkswagen’s North American sales were beginning to take off in 1955. The company thought that a good way to get in with its dream market would be to start assembling Beetles over here. An ex-Studebaker facility in New Brunswick, New Jersey, was purchased to begin U.S. production. VW owned this plant for six months and one day.
Although the Beetle was simple, it was built to demanding standards. Prices got out of control before VW built one car. One tale from the 1965 book Small Wonder recounts a prospective U.S. supplier's reaction after examining the Beetle. "You don’t have seats in your cars,” the man explained to VW executives. “You have chairs.” Then he boosted his cost estimate.
Outside factors were also not helping VW in the United States. The big domestic automakers set a new sales record in 1955. Unions and suppliers got top dollar because the Detroit guys were selling cars as fast as they could produce them. Plus, there were plenty of suppliers who were not keen on giving the best price to a German company that wanted to invade our country only ten years after WWII. The inexpensive Beetle was a budget nightmare, and the New Jersey factory was sold before VW came close to producing a U.S.-built Beetle.
The new plant in Chattanooga comes during a different atmosphere in the U.S. Unlike either of the previous two plants, a foreign manufacturer building cars here is no longer a big deal. Also, the unions don’t have to be part of the Tennessee plant. Even if the unions become involved, it is a much-improved relationship from the “Us vs. Them” mentality that labor and management held during VW’s two previous U.S. attempts.
The third time will likely be the charm for a Volkswagen plant in the United States...as long as they realize we’re not all cowboys who can’t tell Texas from Tennessee.
