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VW exec calls US ops a 'disaster'

Today in the Tell Us How You Really Feel file we have Bernd Osterloh, head of Volkswagen AG's Group Works Councils and member of the company's supervisory board, labeling the company's US operations "a disaster." Why? Because Osterloh believes VW of America doesn't have the models it needs to be competitive here, hasn't been decisive enough about its plans and German higher-ups still don't understand the US market.
In truth, the top labor rep at the German conglomerate is echoing sentiments we've heard from VWoA executives for years, and there's been the same commentary from dealers: Germany doesn't pay enough attention to what the US market really wants. Even ex-VWoA CEO Stefan Jacoby, who preceded the recently departed Jonathan Browning, said early in his tenure that one of his tasks was to get his German bosses to start delivering what the US market demanded. New CEO Michael Horn is saying much the same thing seven years later, telling Sky News that it has to increase "the speed at which we bring new models to the market and innovation to the market."
Osterloh wants to get "more models" here, including a pickup truck, but we'd wonder if the economics have changed from when Jacoby said they'd need to sell 100,000 per year to make money. Osterloh also wants a decision on where the CrossBlue will be built. Although it looked as if the Chatanooga, TN plant would get the call, the Puebla, Mexico plant is still in the running because of lower operating costs. No matter what happens right now, Osterloh thinks the situation won't get better for another two years when revamped models arrive, but at least the company can start taking the steps for a better US future.

VW and partner SAIC start building $2.5B Audi plant in China

BEIJING — Volkswagen AG's China joint venture with SAIC Motor Corp has started building a $2.5 billion new energy vehicle (NEV) plant in Shanghai, which will make VW's luxury Audi brand cars, a possible first for the venture. The new plant is a key step for Audi to diversify production of its cars in the world's largest car market from its long-standing local partner, China FAW Group Corp. This shift has been delayed amid resistance from local dealers. SAIC Volkswagen said the new plant would have an annual capacity to make 300,000 cars and begin production from 2020. Audi sold 481,387 vehicles in China from January to September this year. The announcement comes the same week Tesla secured a Shanghai location for a Gigafactory battery plant to serve the Chinese market. Audi unveiled the plan to bolster ties with SAIC in late 2016. Earlier this year, the Germany luxury carmaker bought a 1 percent stake in the SAIC Volkswagen venture, paving the way for the joint venture to produce and sell Audi cars. Volkswagen currently gets a larger proportion of the proceeds from the 50-50 tie-up with SAIC than from its 40 percent stake in the venture with FAW. SAIC Volkswagen said in a statement on Friday the plant would cost 17 billion yuan ($2.5 billion) and would make VW and Skoda models as well as Audi cars. It will help VW tap China's fast-growing market for NEVs, a category comprising electric battery cars and plug-in electric hybrid vehicles. ($1 = 6.9314 Chinese yuan renminbi) Reporting by Yilei Sun and Adam JourdanRelated Video: Image Credit: Reuters Green Plants/Manufacturing Audi Volkswagen Skoda Electric Hybrid

Volkswagen officially grants access to UAW in Tennessee

An audit at the Volkswagen factory in Chattanooga, TN has revealed that at least 45 percent of the facility's workers support unionization, leading the German company to grant access rights to the United Auto Workers. This is a tremendous step in the UAW's long-running and at times contentious pursuit of the workforce at Chattanooga. With this latest move, "local leadership is ready to move forward with additional conversations with the company," the union said in a statement obtained by The Detroit News. "As a starting point, UAW Local 42 will take advantage of the company's offer to establish bi-weekly meetings with Volkswagen Human Resources and the Volkswagen Chattanooga Executive Committee." The News reports that UAW Secretary-Treasurer Gary Casteel, shown above speaking at the Chattanooga plant last summer, claimed these meetings "will remind Human Resources and the Chattanooga Executive Committee of the mutually agreed-upon commitments that were made by Volkswagen and the UAW last spring in Germany. Among those commitments: Volkswagen will recognize the UAW as the representative of our members. We believe Volkswagen made this commitment in good faith and we believe the company will honor this commitment." It's important to note that despite Casteel's remarks, this is not a collective-bargaining agreement, Harley Shaiken, a labor professor at University of California, Berkeley, told The News. "But it is a step in the direction of recognition, which ultimately could lead to collective bargaining. This is not the end point," Shaiken said. "We don't know what's next. We're in unchartered territory."