Volkswagen Westmoreland Assembly Plant

Volkswagen Westmoreland Assembly was a manufacturing complex located southeast of Pittsburgh in Westmoreland County, Pennsylvania, near New Stanton — and noted for manufacturing 1.15 million Volkswagens from 1978 until 1987. When VWoA began manufacturing in the unfinished Chrysler plant, it became the first foreign automobile company to build cars in the US since Rolls-Royce manufactured cars in Springfield, Massachusetts, from 1921 to 1931.

Chrysler had called the facility the ''New Stanton plant''; Volkswagen changed the name to ''Westmoreland''.

The factory manufactured a range of fuel-efficient small cars with gasoline and diesel engines, all variants (or rebadged models) of Volkswagen's Golf: the Rabbit (79–84); Rabbit GTI (83–84); Rabbit Pickup (1979–1982); the Golf Mk2 and GTI (85–89) and the Jetta (87–89). Built with the largest incentive package the Commonwealth of Pennsylvania had ever offered, the factory had an estimated annual capacity of 240,000 cars, and reached production of 200,000 in 1980. Engines and drivetrains for Westmoreland production were sourced from Germany. Employment, projected at 20,000, reached its highest level in mid-1981 at 6,000 and by 1984 had dropped to 1,500.

Initially the plant was successful, but numerous factors contributed to a sharp decline in sales of the cars manufactured at Westmoreland and the factory's ultimate demise. Increased competition in the North American small car market, easing of the period's fuel crisis, poorly received changes to the character of the cars, VWoA's long product life-cycle, the internal economics of the plant, persistent labor unrest and poor networking between Westmoreland and Volkswagen headquarters in Germany. The factory operated at less than half its design capacity and VWoA suffered operating losses during the last five years of its operation. Sales of Volkswagen's US-built cars plummeted by nearly 60% between 1980 and 1985.

Japanese manufacturers soon followed VWoA's presence in the US – achieving success but having non-unionized plants including Honda at their Marysville, Ohio, plant and Toyota at their Georgetown, Kentucky, plant.

By the early 1980s, Volkswagen began retreating from manufacturing in North America, selling another assembly plant it had begun developing and two ancillary plants to Westmoreland in West Virginia and Texas. With the plant operating at 40% capacity and annual losses of $120 million, Volkswagen closed Westmoreland Assembly on July 14, 1988.

Volkswagen later expanded production of cars in Puebla, Mexico, and in 2011 inaugurated its Chattanooga Assembly Plant.

The Westmoreland plant was subsequently used by Sony in the production of televisions from 1990–2008, as the Sony Technology Center-Pittsburgh (STCP). As of 2014, the site is marketed as ''RIDC Westmoreland'' and is owned by RIDC, the Regional Industrial Development Corporation of Southwestern Pennsylvania.

Beginnings

Prior to development of Westmoreland Assembly, Volkswagen of America was headed by James W. (Jim) McLernon, a former Chevrolet manufacturing chief. Toni Schmücker, VW management board Chairman, selected McLernon to investigate feasibility of US production, in part to help the company avoid international currency fluctuations and high German wages.

After investigating five sites and narrowing the field to two alternate sites, a former Westinghouse appliance factory in Columbus, Ohio, and a federal tank plant in the Cleveland suburb of Brook Park, VWoA signed a 30-year lease on Chrysler's unfinished ''New Stanton plant'' originally constructed in 1969 on at Route 119 in East Huntingdon Township – just outside New Stanton, Pennsylvania.

At Westmoreland, Volkswagen developed three major buildings, two minor buildings, and a waste water treatment system. Richard S. Cummins, the plant manager, described the inside of the largest unfinished building with 2.1 million square feet, as a "three-dimensional chess-board covering an area of over 37 football fields." Land was graded for a new railway spur, and underground holding tanks constructed for the various fluids to be pumped into the building. The complex included several two-story buildings: an administration building, a building with worker facilities and a metallurgy, plastic, rubber, and electrical testing lab, a building with a paint lab as well as durability and emissions testing and a rail yard.

VWoA purchased the site with a $40 million loan from the state of Pennsylvania and then invested about $250 million to ready the factory for assembly. In the richest corporate deal to date in Pennsylvania history, state and local officials offered VWoA an incentive package worth nearly $100 million in government assistance, highway and rail improvements and a property-tax exemption.

VW subsequently purchased an American Motors stamping plant in South Charleston, West Virginia, investing further to make the factory capable of producing exterior sheet metal stampings for Westmoreland and then purchased a small plant in Fort Worth, Texas for manufacture of the air-conditioning and heating systems and plastic-trim to facilitate integration of factory installed air-conditioning in the Westmoreland-manufactured cars. VWoA later purchased a former Chrysler missile plant in Sterling Heights, Michigan, to begin developing its second North American assembly plant.

On April 10, 1978, VWoA dedicated Westmoreland Assembly by driving its first car off the line, a two-door white Rabbit (in ''Rabbit C'' or mid trim level, as with all the initial production) — which had actually been assembled the week before and was shipped after the plant dedication to Volkswagen's Wolfsburg headquarters for its museum. Toni Schmücker, Richard E Dauch, James McLernon, U.S. Treasury Secretary Michael Blumenthal, Pennsylvania Governor Milton Shapp and 1,200 employees were on hand the day the first car came off of the line. In his remarks, Schmücker, CEO of Volkswagen AG, paraphrased Neil Armstrong remarks when stepping onto the moon, saying "this may be one small step for America, but it is a giant step for Volkswagen."

According to Richard Dauch, who was general manufacturing manager for Volkswagen Manufacturing of America from 1976 to 1978, "within 18 months, from 1976 until April 10, 1978, we had production, excellent quality with no product recalls, over 1,000 (completed cars) a day within two months of launch, two-door, four-door, diesel, K-Jetronic (fuel injection), 10 different body colors, four different interiors. And in that period, every single goal set by the board of directors was met or exceeded, we launched on time and early. We were staying within budgets. We were actually making profits." As of 1979, Volkswagen was "extremely pleased with the quality and productivity" of Westmoreland Assembly.

Problems

Prior to manufacturing the first car, VWoA conceded that Westmoreland "was a gamble in 'a problem market' marked by sluggish sales and intense competition from other small car makers." Changes to the cars' Germanic character were not well-received. Problems surfaced with the plant's economics as well as vehicle quality. Also, Westmoreland was beset with unionized labor problems.

Americanization

Neither buyers nor company executives in Germany were pleased with the ''Americanization'' of the Rabbit using a softer suspension, less expensive interior materials and decidedly un-Germanic color-keyed interiors. ''Popular Mechanics'' said "inside is where you really see the Americanization of the Rabbit, the interior is comfortable but puffy. In fact, it's downright tacky" – adding that the side marker lights on the Rabbit looked as if they "came off a kids bike." ''USA Today'', in 2010 described the Americanization of the Rabbit from Westmoreland: "''Malibu-ing the Rabbit'' was the dismissive comment at the time, a reference to a soft-riding Chevy model unloved by fans of German makes." Management at Volkswagen of America was also described as having become Americanized and having struggled with advertising for Westmoreland's main product, the Rabbit. In his 2002 book ''Getting the Bugs Out: the Rise, Fall, and Comeback of Volkswagen in America'', David Kiley said that "the German character was fading into oblivion."

By 1983 Westmoreland went back to using stiffer shocks and suspension with higher-quality interior trim. Volkswagen claimed to have made 1,300 changes to the Rabbit for the 1983 model year, with all Rabbit models getting a retuned suspension with stiffer spring rates and revised shock valving. This, along with the North American introduction of the GTI, was part of efforts by new Volkswagen CEO (and former Volkswagen of America president) Carl Hahn and American Volkswagen brand leader Jim Fuller to de-Americanize the VW brand in the US.

Plant economics

In some respects, the Westmoreland plant was "virtually outdated by the day it opened." A similar plant opened at the same time by Chrysler had far more automation and could produce half again as many cars as Westmoreland. VWoA's plant had to run at 85% of capacity to break even, rather than the projected 50% — which proved detrimental when Rabbit sales fell and VWoA had to begin offering rebates on a stock of unsold cars. The West Virginia stamping plant arrangement proved problematic. The plant was not automated, was four hours from Westmoreland, and body panels had to be shipped between the two sites. At times, crucial parts were rushed to Westmoreland by helicopter or Lear jet to avoid a shutdown.

Quality

Consumers Union ranked the VWoA Westmoreland vehicles in 1977-79 had "worse than average maintenance record, including an oil burning problem." An analyst with Drexel Burnham Lambert said in 1987 "the quality of the cars built in Pennsylvania wasn't up to the quality of the cars in Germany." An analyst for Global Insight

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