Open for business: VW begins building Passats in Tennessee

Tuesday, May 24th, 2011 @ 8:42 a.m.

With rising demand for its North American-oriented vehicles, like the redesigned Jetta, Volkswagen is bullish on its second effort to build cars in the United States.

The new facility in Chattanooga, Tennessee, formally opens today, with a workforce of around 1,700 that could grow to more than 2,000. It will be the exclusive home to the North American-market Passat, which isn’t expected to be sold overseas.

This isn’t VW’s first effort in the U.S.: Many potential Passat buyers probably won’t be aware of the Westmoreland County, Pennsylvania, plant that VW ran from 1978 to 1988. Between questionable management, shoddy quality and designs oriented too much to American buyers, Westmoreland-built VWs developed a negative stigma that led to poor sales.

But this isn’t the same VW, the automaker promises. Through the end of April, sales are up 23 percent, driven primarily by a big 87 percent increase in demand for the redesigned 2011 Jetta. Aimed specifically at buyers in the U.S., the car was nearly universally panned by critics because of its perceived Americanization, but has hit a home run with consumers thanks to its roomier interior and lower price.

The workforce
So far, VW has resisted attempts by the United Auto Workers union to assemble its 1,700-strong workforce – something it did not do back in 1978 when it opened the Pennsylvania plant.

VW says its base wages are slightly higher than those found at UAW plants; assembly positions start at $14.50 but can raise in three years to $19.50 and there are performance-based bonuses. UAW plants pay workers $28 per hour, but 2007 concessions mean that automakers only need to pay new hires $14 per hour.

The German automaker puts each assembly line worker through a three-week non-manufacturing training, which includes mandatory classes to learn about the history of VW. In addition, workers get to test drive new VW products. Then, workers spend six to nine weeks in on-the-job training.

VW can’t bar the UAW from talking to its employees and encouraging them to join its ranks, but the union has rarely succeeded in convincing employees of foreign automakers to unionize.

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Nissan Comes Out Of The Closet Against Anti-Gay Tennessee Law

Gay Flag

If you didn't already know what Nissan's words meant, you'd likely have no idea what the company was saying in a statement it released yesterday.

So we'll translate.

"Nissan North America, a company with its headquarters (and two factories) in the state of Tennessee, opposes a pair of recent bills in the state legislature that overturn Nashville's law prohibiting companies that do business with the city from discriminating against gay, lesbian, and transgender Tennesseans who work for them."

That's not, of course, what Nissan said. In its entirety, the statement reads:

BACKGROUND: Recently a number of special interest groups in Tennessee and abroad have voiced opposition to HB600/SB632, the "Equal Access to Intrastate Commerce Act," which is awaiting Governor Haslam’s signature to be signed into law. Nissan is clarifying its position on this piece of legislation and is issuing the following statement:

STATEMENT: "Nissan opposes HB600/SB632. While we believe in a standard State regulatory environment, we share public concerns about this bill‘s impact on diversity and inclusiveness. Nissan is committed to providing a diverse and inclusive environment for all stakeholders.”

There are some words missing from the statement, among them "gay," "lesbian," and "transgender." Because the individuals to whom they apply are the actual target of the bill.

Under the slightly deceptive title of the "Equal Access to Intrastate Commerce Act," the bills (HB600 and SB632) nullify an ordinance passed on April 5 by the Nashville City Council that requires companies doing business with the city not to discriminate on the basic of sexual orientation or gender expression.

The Republican-dominated Tennessee legislature passed the measure by more than a two-thirds margin last Wednesday.

Yesterday, Governor Bill Haslam (R) signed the bill.

Under current Tennessee state law, it is illegal to discriminate on the grounds of race, creed, color, national origin, religion, sex, or age. That law does not include protection on the basis of either sexual orientation or gender expression.

Nissan's involvement comes not only because it has $3.5 billion of investment in the state, but because it is on the executive committee of the Tennessee Chamber of Commerce, which had issued a statement supporting the bill.

Members include both large global companies (Alcoa, AT&T, Caterpillar, Comcast, DuPont, Embraer, FedEx, Pfizer, United HealthCare, and Whirlpool), and hundreds of smaller local companies.

The Chamber said its concern was that any employment requirements that differed from state law would "create an additional burden on companies that are endeavoring to be competitive and provide jobs to all Tennesseans based on their individual qualifications and merit."

Effectively, it raises the specter that the time and cost of not discriminating against gay, lesbian, and transgender Tennesseans who work for them--or apply to do so--might so burden local companies that they become uncompetitive, ultimately close up shop, and put many more Tennesseans out of work.

The Chamber and its members quickly came under criticism from civil-rights advocates who accused it of lobbying to quash the Nashville law. The outcry became so intense during the last week, in fact, that the Chamber reversed itself yesterday.

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