Production is outpacing demand at Volkswagen’s first U.S. manufacturing plant since 1988, prompting the brand to cut 500 contract jobs.
“We had too high expectations,” Frank Fischer, the head of Volkswagen’s Chattanooga operations, told the Chattanooga Times Free Press. “The pipeline is over-full from the facility to the dealers.”
Sales for the American-focused sedan are still extraordinary compared to 2011. Just under 26,000 sold that year, and the brand is already on pace to pass that figure by month’s end. Last year 117,023 units found homes. But sales aren’t keeping up with the facility’s ambitious current rate, which would produce 170,000 units annually.
That schedule sees production running two 10-hour shifts from Monday to Saturday with three teams. Volkswagen plans to reduce that to two teams saddled with two 10-hour shifts from Monday to Thursday.
Layoffs at the plant will be complete by June 30, reducing the workforce from about 3,200 to roughly 2,700.
Ballooning sales numbers in 2012 can be attributed both to the car’s domestic production and the brand’s choice to offer a different model tailored to the North American market.
[Source: Automotive News]
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