VW’s Former Brussels Plant to Build Audi A3, A1

Audi AG finalizes a plant takeover that will give the auto maker increased production flexibility for its A3 small car and add capacity for its A1 model.

Belgian Prime Minister Guy Verhofstadt joins Martin Winterkorn, CEO of Audi parent Volkswagen AG, at a ceremony to mark the plant’s transition from a VW plant to an Audi site.

The deal, brokered by the Belgian government following a series of strikes precipitated by last year’s announcement that VW would shift Golf production from Brussels to two plants in Germany, will complement A3 production at Audi’s plant in Ingolstadt, Germany. Anticipated 2007 production volume at Brussels is about 84,000 vehicles.

Production of the A1 will be added in 2009 as Audi seeks to achieve its goal of building 1.5 million cars annually by 2015. By the end of 2009, Brussels will be the exclusive home to A1 production.

Key to the deal was a collective agreement negotiated with the unions that represent the more than 3,000 hourly workers employed at Brussels. The agreement will reduce labor costs by 20% within three years, but also includes job guarantees until 2010, flexible working hours, an income guarantee, employee profit-sharing and a health-care plan designed to prevent illness and injury.

The addition of a second A3 production site enables Audi to adjust line rates between Ingolstadt and Brussels based on demand.

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