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VW parts center not yet ready for main jobs push

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By Damon Lawrence

When are the jobs coming?
That’s what Bob Kite, a member of Roane County Industrial Development Board, recently wanted to know about Volkswagen’s new Southeastern Regional Distribution Center. 
“When you’re full PDC (parts distribution center) how many people do you expect to employ?” Kite asked.
“I don’t necessarily want to be quoted as saying any particular number,” said John Kutz, senior manager of the facility. “Anywhere from, probably, 20 to 50 people.”
The new distribution center is at Roane Regional Business and Technology Park in the eastern section of the county. The industrial development board held its monthly meeting there this week and took a tour afterward.
“I’d say it’s probably the nicest building we have in our network now as far as our warehouses are concerned,” Kutz said.
Landscaping was under way at the facility Tuesday, and Kutz said painting needs to be done inside.
“The building is not 100-percent complete yet,” he said. “We’re in the punch-list phase right now.”
The facility has already started warehousing parts.
“We are shipping in and out,” Kutz said. “We’re receiving, probably, two to three trucks a day, as well as shipping out, probably, two to three trucks a day of product.”
Kutz said the warehouse is divided into two halves — one side for the redistribution center and the other for the parts distribution center.
“Right now we’re an RDC, meaning we ship just directly to our own internal customers,” he said. “When we become a PDC, we’ll actually ship out to all of the dealers.”
The Roane County facility will serve around 110 Volkswagen and Audi dealers, including those in Indiana, Ohio, Virginia, North Carolina and Tennessee.
“Ultimately, when we’re up and running with the PDC, we’ll probably have anywhere in the ballpark of $13 million to $15 million of inventory at any given time in the building,” Kutz said.
Kutz said the center plans to start shipping to dealers at the end of the year.
“Currently we only service the Passat parts going out to all of the other PDCs in our network,” he said.
Right now just three employees work at the facility.
In addition to Kutz, there is also an inventory manager and operations manager.
“We may have a fourth starting here relatively soon that will really act as our trainer for the warehousemen that start with us,” Kutz said. “It will be an existing employee that we’re going to bring in.”
Kite asked Kutz when Volkswagen plans to start hiring for the facility. 
“That’s kind of what we’re trying to figure out right now with the level of business that we’re going to end up having,” Kutz said. “Most likely in the September-October timeframe.”
Those people may need training at the Volkswagen plant in Chattanooga, where the Passat is built.
“Most likely, due to our proximity, we will want all of our employees to go through the lean training that they do down there,” Kutz said. “That will be with our official full-time Volkswagen employees. We’re going to have a mixture of contract and full time most likely in the beginning, just until we get up and running and kind of figure out who’s going to work out for us and who’s not.”
Kite asked if Volkswagen has any plans to institute the training program at Roane State Community College.
“I’m not sure,” Kutz said. “My HR guy is coming next week, and we’re going to sit down and talk through a lot of that stuff and try to figure out exactly what the game plan is going to be as far as training is concerned.”
According to The Roane Alliance, the county’s economic development organization, the facility is supposed to employ “at minimum, 45 people.”
Kutz indicated there are no set number of employees planned for the facility.
“Right now it just depends on what dealer mix we decide to bring into this site, and how much business picks up on the RDC side,” he said.
Kutz said the number of employees could also depend on what happens with the Chattanooga plant.
Although disappointing Passat sales recently resulted in an announcement of 500 layoffs there, Kutz said there’s been talk about Volkswagen building a seven-passenger SUV in Chattanooga.
“That remains to be seen whether that ends up getting built, but if they get that vehicle, then obviously all of those parts come here as well, which means our business increases, so we’re crossing our fingers hoping that happens,” he said.