Chattanooga Volkswagen plant expansion hinges on acceptance of panel, German labor official says

photo New Volkswagen Passats await transport outside of the Chattanooga assembly plant.


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A top global official for Volkswagen's works council says the group will block the automaker's expansion in Chattanooga unless a similar labor panel is put into place at the factory.

A German newspaper reported that VW Group deputy council chief Stephan Wolf said, "We will only agree to an extension of the site or any other model contract when it is clear how to proceed with the employees' representatives in the United States."

Wolf's remarks, reported by the daily Handelsblatt, were made at a recent event at VW's headquarters in Wolfsburg, Germany, marking production of the 30 millionth Golf.

Of more than 60 VW factories worldwide, the Chattanooga plant is the only one without a works council, which represents employees on such issues as pay, benefits and working conditions. But according to U.S. labor law, the local plant's workforce would need to OK union representation before the works council could be set up.

Representatives for the United Auto Workers are in Chattanooga and trying actively to gain VW employees' endorsement.

On Friday, Hamilton County Commissioner Tim Boyd, a past critic of UAW efforts, wouldn't comment on the works council.

But he said the union has "a horrible track record in North America" and that "they virtually put Detroit out of business."

"The taxpayers of Tennessee have invested over $554 million," Boyd said, citing the cost of tax incentives provided by state and local governments to gain the Chattanooga plant. "The UAW hasn't invested a dime."

However, a VW plant worker who supports the UAW said organizing efforts are going well and he thinks union representation and a works council will happen.

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Still, Chattanooga employee Lon Gravett said Wolf's comments concern him because the choice is supposed to be up to the workers.

"It shouldn't be something that comes under a threat," Gravett said. "This plant has been good for Chattanooga."

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president of marketing, said Chamber officials haven't heard of any tie between employee representation and the potential expansion.

"We haven't heard it directly from the company despite being very engaged for many months on a range of issues," he said.

VW officials have said that Chattanooga and the automaker's facility in Mexico are possible sites to build a new sport utility vehicle for the North American market.

The company is expected to make a decision sometime this year.

Earlier this month, Chattanooga Mayor Andy Berke and Hamilton County Mayor Jim Coppinger traveled to Germany for talks with VW officials about the potential expansion. They couldn't be reached for comment Friday.

This spring, VW's board member in charge of human resources globally said the automaker was talking with the UAW about setting up a German-style works council at the Tennessee plant. It would be the first U.S. auto plant to have such a labor board, experts have said.

The step also would provide a much-sought-after foothold by the UAW at a U.S. auto plant owned by a foreign automaker.

The Chattanooga Chamber and Republican Gov. Bill Haslam have criticized the effort, saying the UAW isn't needed.

Contact staff writer Mike Pare at or 423-757-6318.