TN Will Likely Keep Pledge to Grant VW $300M Incentives Package

Despite some Tennessee lawmakers displeasure with the growing influence of the United Auto Worker’s union at the Volkswagen plant in Chattanooga, the Legislature appears likely to approve a $300 million incentives package for the automaker.

A few members of the General Assembly’s Hamilton County legislative delegation grumbled to the Chattanooga Times Free Press editorial board last week that VW’s continued acceptance of the labor union was causing them some consternation about whether or not to approve the proposed incentives in this year’s legislative session.

Sen. Todd Gardenhire, a Chattanooga Republican, told TNReport Wednesday he was upset with the automaker and labor union for “not honoring” the outcome of the unionization vote last year. “They voted in a fair election not to be represented by UAW, and then they turn around and ignore that,” he said. But Gardenhire added that if a promise was made by the state’s governors, the Legislature would “honor that” because they didn’t want to “embarrass the state.”

Likewise, Senate Speaker Pro Tem Bo Watson said while the incentives could probably come up  during the greater budget discussion, the Volunteer State has “a long history of honoring its commitments, and none of us collectively are going to allow that not to happen.”

Additionally, House Majority Leader Gerald McCormick, R-Chattanooga, told reporters Wednesday that while he didn’t want the UAW to “slip in the back door because of a secret deal with Volkswagen,” he expected the Legislature to approve the incentives because “Tennessee will keep its promises.”

And despite the skepticism of Hamilton County legislators, the head of Volkswagen Group for the Americas said he is “very confident” the incentive package will be approved.

Gov. Bill Haslam said last week he understood the lawmakers unease, and he had “expressed” similar concerns as well, but he hoped the local lawmakers would support the incentives package because their votes — as the hometown gang — would be “very important” to its passage. The package was offered to the German company last summer to encourage expanded production at the Southeast Tennessee location. The automaker announced in July Chattanooga would be home to production lines for the new CrossBlue and Cross Coupe GTE.

“We’ll have those discussions about where we think Volkswagen is and why we think this is the right proposal for the state,” Haslam said.

Haslam added future efforts by Tennessee to recruit businesses could be harmed if the legislation fails. “We always put that as a caveat to the deal, that the Legislature has to approve, but historically, that has always happened in Tennessee,” he said.

Last February, the UAW failed an attempt to unionize the plant — 712 to 626 — leading them to file a complaint against several Tennessee politicians who suggested the unionization could interfere with the incentives. The UAW later dropped the case, citing the time it would have taken to settle.

Haslam said this Spring he hadn’t intended withholding incentives from the company as a threat — he was just making “a statement of reality.”

The UAW has since established a chapter at the plant, and currently claims to represent about 45 percent of VW employees, giving the labor group the right to meet with top managers every two weeks, as well as regular plant access. Because of the closeness of the labor vote Volkswagen adopted a new policy to allow multiple unions to represent workers, with representation rights depending on the number of employees the union speaks for.

A rival labor group — the American Council of Employees — has complained that VW is showing favor to the UAW. ACE has also been working to sign up members in what they call an effort to offer the plant’s employees a choice in representation.

The UAW announced in December that Chattanooga’s Local 42 had been invited to participate in an executive committee meeting of the Volkswagen Group Global Works Council in Germany this month. The ACE interim president has disputed the UAW’s numbers, and said a number of the signatures the autoworkers union claims are invalid.

The free-market Nashville-based Beacon Center of Tennessee awarded its 2014 Yuletide season “Lump of Coal” jointly to UAW and VW. The Beacon Center bestowed the “dubious distinction” on UAW and VW for having “seemingly worked together to bilk the taxpayers of the state out of hundreds of millions of dollars,” a Beacon Center blog post declared. The center also alleged that despite being “firmly rejected” by employees at the plant, “UAW has continued trying to bully its way into the plant, and VW has seemingly been more than happy to comply.”