Volkswagen will add 800 new jobs at its Tennessee plant to boost production of the popular Passat sedan.
The jobs will increase the plant's work force to more than 3,500 by the end of the year, the German company said Thursday. The additional workers will be used to bolster the existing two shifts at the plant, and expand production to Saturday.
"We're adding a third team at this plant for a simple reason: Customers want to buy Passats," said Jonathan Browning, the president and CEO of Volkswagen Group of America.
The plant will operate 120 hours per week with the new workers, up 40 hours from current levels, he said.
Browning said the extra work force will help the plant ramp up and be able to produce 170,000 vehicles next year, most of which are destined for the U.S. market. Others are exported to Canada, Mexico and South Korea, he said.
Volkswagen sold nearly 23,000 Passats in the U.S. last year, an 83 percent increase over 2010. Sales have been stronger so far this year. Through February, sales of the redesigned sedan topped 14,500, according to Autodata Corp.
Browning said March sales are on pace for 10,000.
VW built its first Passat at the plant last April. It now rolls out 35 cars an hour at the plant, which surpassed 50,000 vehicles in February.
"Volkswagen is definitely on a roll in this market," Browning said. "I can assure you, we don't plan to stop."
Volkswagen AG, the world's second-largest car company, said last week that it intends to increase deliveries and revenues in 2012 despite difficult conditions in Europe.
Volkswagen Chattanooga CEO and Chairman Frank Fischer said producing vehicles in the U.S. allows the company to be "very strongly independent of the exchange rate."
The award-winning version of the Passat is targeted at customers with different priorities than those in Europe, ranging from a larger size to more cup holders, Fischer said.
"After all, the U.S. customer doesn't drive 240 kph (149 mph) on the Autobahn," Fischer said in an interview in German.
Fischer said it's out of local VW officials' hands whether the company decides to add more production or build other models at the plant.
"At this point it's only about Passat, no model has been decided yet," he said. "The Passat is selling so well so we should really concentrate on what we're doing right now, and continue to ramp up the factory."
Thursday's jobs announcement was in addition to 200 new positions the company announced in January. VW officials said they expect to see a spike in hiring among their main suppliers located near the plant, creating several hundred new jobs among them.
Earlier this month, the company said it will open a $40 million distribution center for parts about 80 miles from Chattanooga. VW plans to hire about 45 people at the center.
Tennessee Gov. Bill Haslam welcomed the announcement.
"Twenty-five percent of the Volkswagens sold in America will be made in Tennessee now," he said. "That's a pretty significant achievement for a company that rolled off its car here in April of last year."
Haslam said VW will qualify for economic incentives that are part of a formula agreed to as part of negotiations to bring the $1 billion plant to Tennessee. He did not specify how much the incentives will be worth.