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How important to Volkswagen is its new 1995 Passat GLX?

Before you answer, consider that Volkswagen AG of Wolfsburg, Germany, lost $1.13 billion last year, has slashed its work force by 14,000 employees, cut the pay of the remaining 51,000 workers by 10 percent and reduced its work week to four days.If the Passat, VW's new mainstream competitor to such industry standards as the Honda Accord and Toyota Camry, flops . . . well, some things are better not contemplated.

Fortunately, if the quality, style, performance and price of the new Passat are all that's necessary for it to succeed, then the folks at VW can stop looking over their shoulders. For one thing, sales of all VW products are way up this year. For another, their latest entry, the Passat GLX sedan, can hold its own against the world's best.

Despite all the cost-cutting back home, VW launched its new Passat to the U.S. press in lavish style last week in Santa Barbara, Calif., home to such well-heeled folks as Michael Douglas, Barbra Streisand and many others whose names are not as well known but whose bank accounts run to seven, eight and nine figures.

VW spokesman Steve Wilhite told a press group gathered at the Four Seasons Biltmore that the '95 Passat is not the only thing new at Volkswagen.

"In a very real sense we're new too - new products, improved sales and a new corporate culture. We are rebuilding our organization all focused on one thing: giving the customers what they want."

Part of the reorganization, said Wilhite, is that instead of work flowing down from corporate headquarters to the dealers and then to the customers, the process has been reversed.

In the '90s, the key marketing word is "value," and VW has heard the call. It's no longer enough to simply make a good car, it also has to offer value for the money, said Wilhite, "unexpected value."

With prices starting at $20,890 for the sedan and $21,320 for the wagon - 10 percent below their '94 counterparts - VW believes it has accomplished that mission, particularly if one compares it to such competitors as the Nissan Maxima ($1,000 more expensive), Saab 900 SE V6 (priced $6,220 higher), the Volvo 850 ($6,200 more) or BMW 325i ($12,800 pricier).

VW representatives said the '95 Passat GLX - for now, the GLX is the only Passat sedan available - is scheduled to be available in its 640 U.S. dealer showrooms by Sept. 15.

The new Passat is not derived from the proverbial "clean sheet of paper," but it is completely restyled for '95, and several new safety and convenience features have been added, including dual airbags, ABS brakes, electronic traction control, a modified sports suspension, an anti-theft alarm, 15-inch alloy wheels and integrated fog lamps.

The GLX is a legitimate five-passenger sedan - VW's largest passenger car - with 99 cubic feet of interior space. That is five more than the Accord and more than any Volvo or E-class Mercedes. The Passat's leg room of 82 inches also bests the Accord, Camry and Maxima.

It is evident that Volkswagen has taken apart the cars it considers its direct competition - and even a few residing up the ladder from its market niche - and has told its designers and engineers to beat them all in every category.

It has apparently succeeded. While the GLX sedan was unveiled only last week, the Passat GLX station wagon was trotted out several months ago. In its July issue, Car and Driver magazine pitted the new GLX wagon against the wagon versions of the Honda Accord EX, Toyota Camry LE, Subaru Legacy Touring, Mitsubishi Diamante and Mercury Sable LS.

The VW came in first against that formidable competition in a head-to-head comparison test that evaluated everything from ride, handling and ergonomics to value, styling, utility and "fun to drive" quotient. C&D editors said the Passat wagon exceeded the sum of its parts and, "Simply put, this one pushed all our buttons."

The Passat sedan sure pushed all of mine.

Part of the press introduction for the Passat sedan was a long rally-type drive through the California countryside around Santa Barbara. Of the cars VW made available, I opted for a white one with a five-speed transmission, velour seats and the optional sun roof. Automatic transmission, leather seats, metallic paint, trunk-mounted CD changer and a cold-climate package (heated seats and window washer nozzles) are the other available options.

In my local daily commute through the stop-and-go traffic on I-15, the four-speed auto-shifter would probably make more sense, but on the twisty, two-lane roads that wind through the Santa Barbara hill country, the five-speed manual turned my GLX into a snarling racer that was more fun than should be legal.

The heart of the new GLX is its 2.8 liter, 172 horsepower six-cylinder engine, a power plant that is nothing short of wonderful. It propels the car from 0 to 60 mph in 8.1 seconds (8.3 for the automatic) and keeps right on going to a top speed that is electronically limited to 130 mph. Meanwhile, it sounds all the right auditory cues, has plenty of low-end torque and is exceedingly smooth. The Germans know motors.

If the engine is the heart of the GLX, the suspension is its soul. In a word, it's stiff but not harsh. Rough roads, of which there were a few in our test drive, were handled with aplomb. Corners with warnings of "Reduce speed to 35 mph" could be erased considerably quicker than that with nary a squeak from the 215/50-HR 15 all-season radials.

Bottom line: The Passat is great fun to drive, especially on the open road, and you give up nothing in the way of practicality. Think of it as a sports car with a trunk (and a large trunk at that) and room for five passengers.

Exterior styling: It's in the eye of the beholder, of course, but I was favorably impressed. In place of the flat-faced front end of the old Passat is a new grille that VW describes as "waterfall-shaped." Bumpers, side moldings and mirror housings are all color keyed and the rear trunk edge has a subtle suggestion of a spoiler, which I prefer to the real thing.

Inside is the best. New switches and controls are all well-placed and functional, have a nice high-tech look and, best of all, they feel good. Tactile sensation is always hard to describe, but it is one of those things people mean when they say a car has "quality."

The seats and the steering wheel, the most important part of a car in my estimation, are first rate. Seats are firm and supportive in hard cornering but soft enough for a long, boring ride on a freeway. The new steering wheel (with airbag; so long, motorized seat belts,and good riddance) is leather wrapped and nice to hang onto, which is good, because you spend a lot of time doing just that.

It goes without saying that the GLX has all of the comfort, convenience and power goodies you would expect in a $20,000 car. Nice, unexpected touch: the power window system allows all of the windows (and sunroof) to be opened or closed from outside the car by inserting the key in the door lock.

VW has gone the extra mile in making the new GLX state-of-the-art in its safety equipment, but one feature deserves special mention. The new (with the airbag system) three-point safety belts are linked to what VW describes as a "pyrotechnic device" that ignites during a head-on collision, pulling all the belts tight within 12 milliseconds. This is said to reduce injuries caused by loose-fitting belts.

The Passat is covered by VW's "Protection Plus" program, which includes a 10-year or 100,000-mile limited powertrain warranty. It also includes free scheduled maintenance for two years or 24,000 miles and a free, two-year roadside assistance program. Corrosion is warranted for six years, no mileage limit.