Building the 2012 Volkswagen Passat: A Tour of the New Chattanooga Factory

By Ben Rossi on 3 August 2011
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It’s been almost a quarter century since Volkswagen stopped making cars in the U.S.  The carmaker has never claimed more than 3% of the U.S. market, despite the iconic stature of its Beetle and Minibus models.  But VW has big plans – and lots of capital – dedicated to capturing a bigger piece of the market. And the lynchpin of this strategy is its brand-new manufacturing plant in Chattanooga, Tennessee.

“Das Auto is finally back in the States,” said VW Chief Executive Martin Winterkorn at the plant’s opening ceremony in late May, which was attended by members of local, state, and federal governments as well as top VW officials. “VW has everything it takes to win the hearts and minds of Americans. Let’s go for it.”

Joining the plant in Puebla, Mexico as the only other North American VW production facility, the $1 billion Chattanooga plant, housed in a 2 million-square-foot former munitions factory, has the capacity to produce 150,000 vehicles per year.

Currently, the factory is geared to exclusively produce the 2012 Passat sedan in diesel- and gasoline-powered versions.  The Passat has been completely redesigned for the American market and base-priced approximately $7,000 less than the model it’s replacing. VW officials have said that a decision about other models to be produced there will come within the next year.

According to Volkswagen, the manufacturing depth for the Chattanooga-produced Passat is 85%, meaning that 85% of Passat’s parts come from local suppliers.  At a briefing at the plant attended by TDD editor Jonathan Spira, Frank Fischer, the plant’s CEO, said that VW is looking to expand its adjacent supplier park, which now has eight companies. High manufacturing depth means VW can avoid the increasingly onerous currency-exchange penalties the company has incurred by importing its cars from Europe.

It also means that in addition to the 2,000 workers at the plant – including 400 white collar workers, the consequence of VW moving its manufacturing headquarters to Chattanooga– an estimated 9,500 suppliers will indirectly benefit from the factory. After losing a new Toyota plant to Tupelo, Mississippi, in 2007, the city of Chattanooga, government of Tennessee, and federal agencies put up an estimated $577 million in incentives, the largest offer in history for a car company project, to land the German automaker.  The jobs created by the factory will result in an estimated $12 billion growth to the local economy.


VW aims to reduce the environmental impact of manufacturing in numerous ways. The new plant meets the highest requirements of the U.S. Leadership in Energy and Environmental Design (LEED) standard.  One of the key measures is the use of a painting process without filler, which should cut CO2 emissions by 20 percent. Overall, by ensuring an efficient production process, VW estimates an annual savings of three million kilowatt hours, the equivalent of powering forty-seven 70,000-seat stadiums for an entire football game.

Water efficiency at the plant also meets the most stringent requirements. The factory’s automobile shop is the first in the world to use a waterless separation process for topcoat application. Using a system of drainage channels, the plant recycles water from its cooling system and restrooms, and all of their groundwater, waste management and sewage system comply with LEED standards. Thanks to the use of collected rainwater, the water use at the VW plant will be considerably lower than at plants of comparable size.

The VW plant is the first in the U.S. to use all energy-saving LED outdoor lighting, and production buildings and offices are also equipped with energy-saving bulbs on motion sensors. The entire lighting system uses some 20 percent less energy than a comparable facility.

Most car plants distribute their vehicles on trucks, but Chattanoogaplant uses rail to cut down on environmental costs, loading 550-600 cars out of the facility a day. The Chattanooga train drops off at 16 points across the USA, three in Canada, and one in Mexico. 85% of the vehicles leave Chattanooga by rail.

At the opening ceremony, U.S. Transportation Secretary Ray LaHood touted the TDI (Turbocharged Direct Injection) model of the new Passat, noting that the clean diesel engine can achieve between 40 and 50 miles a gallon on the highway and go from 700 to 800 miles on full tank. He pointed out that the U.S. could conserve 1.4 million barrels of oil a day if one-third of all vehicles used the clean-diesel technology, and emphasized that clean diesel engines will play an important role in the transition to a new transportation system in the United States.

“That is not only because it is the right engine for environmental and climate protection in the USA,” LaHood said. “Clean diesel engines also make sense economically, for both individuals and American companies. The Clean Diesel technology that is found in the new US Passat, for example, makes a genuine difference.”

Click here to continue to Page 2 – Inside the Plant, Volkswagen’s Bid for the U.S. Market, and a Virtual Tour of the Plant

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