VW to Close Its Parts-Making Plant in U.S.

Volkswagen of America, which has been devastated by competition from Japanese imports, said Wednesday that it will close its only U.S. parts-making plant within two years, thus eliminating 870 jobs.

VW said it will shutter its South Charleston, W.Va., stamping plant and will gradually begin laying off its workers in January. Most of the stampings previously made there will be imported from other VW plants overseas, a company spokesman said.

The decision to close the West Virginia plant leaves VW with just two American facilities--its Westmoreland, Pa., assembly plant near Pittsburgh and a small air-conditioning, heating and plastic trim plant in Fort Worth.

Still, VW insisted Wednesday that it has no plans to end its role as an American auto producer by closing its Westmoreland plant, where it builds its Golf subcompact. But the company’s sales of U.S.-built cars have plummeted by nearly 60% since 1980, forcing Westmoreland to run at just a fraction of its capacity. In 1983, the continuing skid forced VW to abandon plans to open a second U.S. assembly plant outside Detroit, and the company sold the half-finished facility to Chrysler.

Through the first eight months of 1985, VW sold just 52,881 U.S.-built cars, compared to 130,247 in 1980, and there seems little hope that VW can pull itself out of its tailspin. Its U.S. operations are completely dependent on the volatile subcompact market, which is becoming more and more crowded with new import and domestic offerings that are frequently less expensive and more advanced than VW’s models.

Help Solidify Position

But VW officials claimed Wednesday that the closing of the stamping operation will help solidify the company’s position in this country by making the Westmoreland plant more cost competitive, since it will use less expensive stampings from overseas.

“VW is definitely staying in the United States and will continue production at Westmoreland,” the VW spokesman said.