Volkswagen, Indiana, unions and the right to work

Volkswagen, Indiana, unions and the right to work

January 31st, 2012 in Opinion Free Press

Volkswagen workers build Passats at the Chattanooga manufacturing plant.

Photo by John Rawlston/Times Free Press.

It is a painful fact that costly, unrealistic collective-bargaining agreements were part of the cause of severe financial troubles at major U.S. automakers in recent years. Ultimately, some automakers needed huge, taxpayer-funded bailouts as a result.

So it was noteworthy recently when Indiana Gov. Mitch Daniels mentioned Tennessee's ability to attract the big Volkswagen manufacturing plant now in Chattanooga as a reason why he supports a right-to-work law for Indiana.

Tennessee, unlike Indiana, is a right-to-work state, meaning that unions here cannot collect mandatory dues.

Daniels apparently feels that Indiana's lack of such a law is at least part of the reason why Volkswagen didn't give serious consideration to Indiana when it was deciding where to locate its new plant.

"I couldn't get VW to return our call," he said on an Indiana TV show.

If a proposed right-to-work law passes in Indiana, it would be the first in the Great Lakes states, Forbes magazine noted, and Indiana would be the 23rd state overall to have such a law.

Volkswagen declined to comment on the article in Forbes, and of course it is impossible to know exactly how big a factor Tennessee's right-to-work law might have been in bringing VW to Chattanooga. Certainly no one argues that it was the only consideration. But labor costs are obviously something that auto companies must think about when deciding where to build an expensive plant.

At any rate, we are pleased that VW saw in Chattanooga and the surrounding region the right combination of factors, from low costs and taxes to the caliber of our workforce to the area's friendliness and natural beauty.

We are reaping the resulting rewards of economic development and job creation.