Behold the Mighty Auto Plant

WOLFSBURG, Germany – Every country, city and state wants an auto factory. There is no better way to create middle-class prosperity than to build an auto plant and no quicker way to destroy it than to close one.

Auto plants create thousands of good-paying jobs for blue- and white-collar workers and bring millions in tax revenues to needy cities such as Detroit and Flint, MI, and barren deserts in Mexico and northern Africa.

In addition to direct jobs, every auto assembly plant creates tens of thousands more jobs indirectly at component plants, suppliers and in the service sector, from software coders to sausage makers (more on this in a minute).

Even Silicon Valley and states and countries that formerly had little interest in vehicle production now understand the raw economic power the automotive industry represents.

Not only is Tesla’s 5.3 million-sq.-ft. (490,000 sq.-m) plant in Fremont, CA, one of California’s biggest manufacturing employers with 10,000 workers, an empty piece of desert in Nevada now is home to Tesla’s Gigafactory, a giant facility that builds Tesla batteries. Tesla says the Gigafactory will become the biggest building in the world.

But nowhere is the power of automotive manufacturing more apparent than in Wolfsburg, Germany, where Volkswagen’s massive complex directly employs 63,000 people along with 6,000 robots.

It churns out 195 vehicles per hour, 3,500 per day and about 800,000 per year, five days per week on three shifts. Since the end of the Second World War, this one plant has produced almost 11 million vehicles and provided good livelihoods to countless workers.

Production worker salaries here start at about €40 ($45) per hour, a plant spokesman says.

Describing Wolfsburg as a small city is not hyperbole. VW says the Wolfsburg complex footprint is the size of the city of Gibraltar, and the portion of the factory covered by a roof is the size of the entire Principality of Monaco.

It has two powerplants that also power and heat the city of Wolfsburg. It has its own hospital and fire department and its own in-house sausage factory. In the official Volkswagen parts list, the sausage is item no. 199 398 500 A.

“Currywurst” is on the menu at factory cafeterias in Wolfsburg and other European Volkswagen plants for breakfast or lunch, but it’s also sold in grocery stores under the “Volkswagen Originalteil” (German for “original parts”) brand. In 2017, Volkswagen made 6.8 million.

By almost any measure, Wolfsburg is the largest automobile factory in the world. Most auto assembly plants produce about half as many vehicles and have far fewer employees. Nissan’s plant in Smyrna, TN, one of the biggest in the U.S., builds 640,000 vehicles annually with about 8,000 workers.

A spokesman says one of the reasons Wolfsburg is so big is because it manufactures vehicle components for many other plants throughout VW’s vast global empire, rather than outsourcing to independent suppliers.

For instance, about 2,200 employees produce drive shafts, steel wheels, drag link tubes and cable shifts – components typically produced by suppliers. Thousands more skilled tradesmen design and manufacture stamping dies and production tooling.

Advanced product development also is done at Wolfsburg, with 11,000 engineers and designers engaged in future-oriented areas such as electrification, digitalization and automated driving. 

Because it is one of the world’s highest-volume automakers, VW says it achieves great economies of scale and higher profit margins with such a high level of vertical integration. But critics say Wolfsburg employs as many as 20,000 too many workers, an inefficiency created by Germany’s powerful unions and a political environment that makes it almost impossible to eliminate jobs.

As vehicle sales and economic growth slow around the world, and easier-to-build electric vehicles threaten to reduce traditional manufacturing jobs even more, the battle over auto plants is heating up once again.

The motivations remain the same. Every country, every state and every township wants a well-paid middle class. It isn’t just about building things, it’s about building political and economic power.

Automaking is a key element in China’s long-term economic growth plan and now even Vietnam is developing its own domestic auto brand: VinFast.

It’s a safe bet that Wolfsburg won’t close or move anytime soon. But many other factories and their home towns are not so lucky.

General Motors’ Lordstown, OH, complex, opened in 1966, closed in March, its fate tied to the sagging popularity of the compact cars it built and GM’s need to shift its investments to future electric and autonomous vehicles.

But Lordstown is in a key swing state and in a traditionally Democratic county that shifted to the right in 2016 and helped elect Donald Trump president.

Now Lordstown and its former workers are getting more attention from Republicans, and Democrats – and the media – than they have in the past 50 years.

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Drew Winter is senior content director at WardsAuto.