With Electric Vehicle sales not doing as well as expected, Volkswagen said it is going to a two-shift production at its Chattanooga plant and offering some employee buyouts.
Volkswagen Group of America officials said, "Volkswagen Group of America’s (VWGoA) Chattanooga plant will return to a primarily two-shift production model beginning on March 31. This decision reflects the need for flexibility and a profitably-run business to support continued investment and growth in the U.S. market.
"As part of Volkswagen Group’s global efficiency programs, we are optimizing our production capacity across all locations. Given the currently cautious demand for EVs in the U.S., we are adjusting our production in Chattanooga accordingly. By consolidating production into a highly efficient two-shift model, we ensure that our operations remain competitive and agile.
"To accommodate this change, we are offering production employees a voluntary attrition program with competitive benefits, including severance packages, retirement options, and education programs in partnership with the State of Tennessee. Rightsizing our business ensures we remain agile and competitive in a dynamic industry and economic environment. We remain committed to our team members, our customers, and our presence in Chattanooga. This change supports that commitment."
VW did not say how many workers will be affected.
County Mayor Westo Wamp said, “Unfortunately, we are already experiencing the negative impacts of the UAW’s presence in Hamilton County. In most communities where the UAW has gained a foothold, their lofty promises to employees have, in reality, led to job losses and dysfunction.”
The United Auto Workers, which won bargaining rights at the local plant, said it had taken legal action against Volkswagen.
Also, Volkswagen workers at the Chattanooga plant had a rally on Thursday afternoon "to protest the company’s illegal and aggressive anti-union tactics, including its recent attempt to buy off workers and ram through job cuts without negotiating with their union, as required by U.S. law."
The union claimed that Volkswagen violated labor laws by announcing plans to cut shifts and make major operational changes without first bargaining with the union.
The UAW said, "Despite making over $20 billion in profits in 2024 and being the second most profitable automaker in the world, Volkswagen is attacking American jobs instead of negotiating a fair contract for its 4,000 Chattanooga autoworkers."
“Nearly a year ago, thousands of Volkswagen workers in Chattanooga voted to join the UAW, to win the respect and dignified life that union autoworkers at the Big Three have enjoyed for generations,” said UAW President Shawn Fain. “Instead of coming to a fair agreement for their American autoworkers in Tennessee, Volkswagen is choosing to attack American auto jobs."