published Tuesday, June 17th, 2014

Freeman: I hope Volkswagen has a forgiving spirit.

Bill Freeman

I hope Volkswagen has a forgiving spirit.

A few months ago, in the middle of a Republican attack on organized labor and the efforts of hundreds of workers at VW’s Chattanooga plant to organize in order to allow VW to form a “works council” to co-manage the plant the way it does at its German factories, Gov. Bill Haslam suddenly yanked Tennessee’s offer of incentives if VW chose the Chattanooga plant to build its new SUV model.

VW was considering two plants – Chattanooga and Mexico – to build the new SUV, which is supposed to arrive in showrooms in 2016. The plant expansion will mean hundreds of new jobs. If it comes to Tennessee, it will help solidify VW’s presence in Chattanooga and create new business for a variety of auto parts suppliers across the state. Chattanooga needs to win this one — dwindling demand for VW’s Passat sedan last year caused VW to cut about 500 jobs there.

But, in an attempt to muscle VW workers into rejecting the United Auto Workers, the Haslam administration abruptly withdrew an incentives offer, and Republicans stated publicly that future incentives might be tied to VW workers rejecting the union. Sen. Bob Corker’s own behavior – misleading VW’s Chattanooga workforce by, in essence, telling them that a vote for the UAW was a vote against expansion of the plant – was a disgusting abuse of Corker’s Chattanooga ties and his position as a Senator. You would expect Corker to provide more support for the city he once led – instead, he threw his hometown “under the bus.” His actions, along with Gov. Haslam, may very well have cost Chattanooga hundreds of jobs and robbed Tennessee of a stronger automotive industrial base.

The whole episode was a sad, disgusting exercise of raw political power. In essence, Republicans were offering VW workers a bribe: Reject the union, and the state helps secure your jobs.

Even worse: The claim was untrue.

VW officials were not opposed to workers joining the UAW – indeed, until workers at the plant organize, U.S. law prohibits VW from establishing the kind of “works council” management system in Chattanooga that works well for the automaker at its other plants.

By intimidating just enough voters into rejecting the UAW, Republicans actually gave VW one more reason NOT to choose Chattanooga.

For months, the conventional wisdom has been that Chattanooga has the edge over VW’s 50-year-old factory in Puebla, Mexico, but this week it was reported that VW has again delayed its announcement in order to consider a new incentives offer from state officials in Tennessee and compare it to Mexico’s offer.

News reports also indicate that VW – which recently spent $700 million to upgrade the Puebla plant, is also now said to be considering a third alternative – the new factory that VW’s luxury division, Audio, just built in San Jose Chiapa, Mexico, about 35 miles from Puebla. That new plant is where VW will assemble the Audi Q5 SUV.

The Haslam administration’s shameful treatment of VW, driven by the Republican distaste for organized labor, and Corker’s disloyal behavior may have intimidated just enough workers to defeat the UAW, but it also gave Mexico more time to compete for the VW expansion.

I hope VW officials are able to overlook the rude treatment they got from Tennessee Republicans in the past and choose to expand in Chattanooga anyway. If they don’t, however, the people of Tennessee need to seriously question the way Republicans have handled this situation. Republican dislike for organized labor should not be allowed to cost the state hundreds of jobs.

Bill Freeman is the co-founder and co-owner of Freeman Webb, a real estate investment, management and brokerage company established in 1979. Freeman is also the former treasurer of the Tennessee Democratic Party.

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timbo said...

Unions have out-lived there usefulness. I guess ruining Detroit wasn't enough. Now they want to ruin the South.

It is hard to believe this guy is a businessman. I guess he couldn't make it in the Republican party so he became a democrat.

June 17, 2014 at 8:46 a.m.
ChattanoogaVol said...

If VW is stupid enough to want the UAW at their plant, it won't be long before they exit the entire US market and their plant at Enterprise South is a ghost town. Based on VW's track record (800,000 vehicles sold in the US by when? LOL!), I would just hold onto the incentives and tell VW that Tennessee will get back to them when VW proves it has the competency (no good so far) to sell enough cars to continue to be viable in producing them in the US. Until then, NADA.

June 17, 2014 at 8:50 a.m.
timbo said... are exactly right. There is no reason to keep a plant that you didn't pay for except for the manufacturing equipment.

June 17, 2014 at 10:39 a.m.
Rakesh44 said...

Nice and readable article, Volkswagen have a forgiving spirit. The car uses a new fabric and an impact-absorbing body that encapsulates the range of safety features. I would just hold onto the incentives and tell VW to sell enough cars to continue to be viable in producing them in the US. Get more information about Volkswagen Luxury cars of visit here

June 26, 2014 at 2:55 a.m.
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