Volkswagen faces UAW, SUV decisions

Volkswagen faces UAW, SUV decisions

February 21st, 2014 by Mike Pare in Business Around the Region

Volkswagen Chattanooga

Volkswagen's Chattanooga plant is approaching a couple of mile markers today that could help chart its future course.

The United Auto Workers is closing in on a midnight deadline to file an objection with the National Labor Relations Board over last week's election in which plant employees turned down UAW efforts to represent them.

Also, VW's powerful supervisory board meets in Germany and may get an update on a new sport utility vehicle for North America, though a decision isn't expected today over whether Chattanooga or Mexico is the preferred production site.

Labor lawyer Fred Feinstein, who was a general counsel for the NLRB in the 1990s, said the situation in Chattanooga regarding the controversy over the UAW election is "pretty unusual."

Typically, it's the company that's charged with coercion during an election, he said. In this instance, the UAW has publicly complained that outside forces, including U.S. Sen. Bob Corker and other Republican politicians in the state, coerced workers.

The SUV became a controversial element in last week's election when Corker said he was assured that VW will announce in coming weeks that it will assemble the vehicle in Chattanooga should workers vote against the UAW. Also, some state legislators linked financial incentives related to any VW plant expansion to the UAW decision.

"There's a whole different set of principles on this," Feinstein said. "It's something the board would look at (if UAW appeals the vote results)."

The NLRB could order a new election in Chattanooga if the UAW is successful in an appeal.

Feinstein said that 2,000 to 3,000 elections typically occur over a year's time in the U.S. and the board may order re-elections just a few dozen times a year.

"It's in the order of that magnitude," said Feinstein, who sits on a public review board for the UAW.

John Raudabaugh, a former NLRB member, said the Chattanooga election was unusual because the UAW and VW had signed a neutrality agreement.

"In this case, the union and the company were in same bed," he said.

That being the case, he asked who was able to stand up and have a say for those employees who don't want a union if not public officials.

The law professor at Ave Maria School of Law in Naples, Fla., also predicted that if the NLRB did overturn last week's election and order a re-vote, the union would experience another loss at the plant.

"A second election would result in an even greater loss," said Raudabaugh, who does work for the anti-union National Right to Work Foundation.

VW workers voted 712 to 626 last week against organizing the plant.

While the UAW decides today whether to appeal last week's votes, VW's supervisory board could consider North America SUV production today, though a location decision may not be immediately forthcoming.

Tennessee economic development officials said Tuesday they had begun re-engaging with VW officials over the issue of incentives after a previous 90-day incentive offer to Volkswagen expired at the end of January.

"I think we've got some work to do to make it happen," said Bill Hagerty, state Economic and Community Development commissioner, earlier this week.

The vehicle is seen as providing hundreds of new jobs, and hundreds of millions of dollars in new investment, for Chattanooga. The SUV is viewed as a key vehicle for Volkswagen as it tries to power up sales in the U.S.

Last month, VW chief Martin Winterkorn pledged to go on a sales offensive in the U.S. that will include the SUV, though he stopped short of naming Chattanooga as the production site.

"We haven't decided," said Winterkorn on the eve of the North American International Auto Show. "It's a question of economics."

A Volkswagen of America official late last year called the Scenic City the front-runner to land the SUV.

While Winterkorn didn't say when a decision on the SUV assembly site will come, he wants the new vehicle based on the CrossBlue concept unveiled last year in Detroit to be ready for sale in 2016.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.