Tennessee Gov. Lee says UAW will hurt business recruitment, hopes Volkswagen workers vote against union

Tennessee Gov. Lee says UAW will hurt business recruitment, hopes Volkswagen workers vote against union

United Auto Workers union says it has 'rich history' in Tennessee

May 30th, 2019 by Mike Pare and Dave Flessner in Breaking News

Tennessee Gov. Bill Lee speaks during the Tennessee Valley Corridor Summit on the campus of the University of Tennessee at Chattanooga on Thursday, May 30, 2019, in Chattanooga, Tenn. Gov. Lee gave the keynote address to the summit.

Photo by Doug Strickland /Times Free Press.

This story was updated Thursday, May 31, 2019, at 6:49 p.m. with more information.

Tennessee Gov. Bill Lee said today he hopes that workers at the Volkswagen plant in Chattanooga will vote down the union organizing campaign underway by the United Auto Workers.

Lee said during a visit to Chattanooga that an influx of labor unions to Tennessee will hurt the state's economic competitiveness.

Volkswagen-UAW tensions

Tennessee Gov. Bill Lee said Thursday he hopes that workers at the Volkswagen plant in Chattanooga will vote down the union organizing campaign underway by the United Auto Workers.

Lee said during a visit to Chattanooga that an influx of labor unions to Tennessee will hurt the state's economic competitiveness.

"One of the things I am most responsible for as governor is economic development and the recruitment of companies to our state for the expansion and development of jobs," Lee said. "The reality is that it is more difficult to recruit companies to states that have higher levels of organized [labor] activity. That is why, I think, it is in the best interest of the workers at Volkswagen — and really for the economics of our state — that Volkswagen stay a merit [non-union] shop."

But a UAW spokesman said the union already has "a rich history" in Tennessee, citing the General Motors production plant in Spring Hill.

"The governor must have forgotten the UAW and the GM local," said Brian Rothenberg of UAW International. "The governor must have forgotten the hug he gave to [UAW Local 1853 Chairman] Mike Herron at the GM plant earlier this year."

A new union election at the Chattanooga VW factory will take place June 12-14, the third vote at the plant since 2014. That year, the UAW lost by a margin of 712 to 626.

In 2015, a smaller unit of maintenance workers agreed to affiliate with the union 108 to 44, but VW refused to bargain with them, saying it preferred a vote by all production workers. The case was tied up before the National Labor Relations Board and in court for years before an agreement was reached last week for the new election.

Dr. Steven Livingston, associate director of the Middle Tennessee State University Business and Economic Research Center, said Tennessee's standing as a right-to-work state is a key in terms of business recruitment.

In a right-to-work state, employees are entitled to work in unionized workplaces without actually joining the union or paying regular union dues.

Also, he said, when it comes to recruiting foreign companies, German businesses are more used to dealing with unions. Japanese companies, meanwhile, prefer environments without a strong union movement, Livingston said.

Concerning costs, he said, he doesn't think there would be a dramatic increase at VW if the plant is unionized because its wages are already "pretty good." But for a parts supplier that doesn't pay as much, the costs of a union shop may have a bigger impact, Livingston said.

Lee, former owner of the construction contracting firm Lee Enterprises in Franklin, Tennessee, who was elected as governor in November, said he prefers for workers to deal directly with their employer without representation by a labor union, which is how he built his business into one with 1,200 employees.

Least-unionized states

The share of workers who belong to labor unions is generally lower in Southern states. Nationwide, 10.5 percent of all U.S. workers, or more than 14.7 million employees, belonged to a labor union in 2018:

1. South Carolina, 2.7 percent

2. Utah 4.1 percent

3. Virginia, 4.3 percent

4. Texas, 4.3 percent

5. Georgia, 4.5 percent

6. Arkansas. 4.8 percent

7. Louisiana, 5.0 percent

8. Mississippi, 5.1 percent

9. North Dakota, 5.2 percent

10. Tennessee, 5.5 percent

Source: U.S. Bureau of Labor Statistics, January 2019

"I tend to philosophically believe that that direct relationship between an employee and an employer is the best approach," he said. "As governor, I am looking at this from its impact on economic activity and attracting companies."

Lee, who spoke at the Rotary Club of Chattanooga and at the Tennessee Valley Corridor National Summit, said the reality is that it's more difficult to attract companies into states that have higher levels of organized labor.

"It makes it more difficult and makes us less competitive as a state the more major manufacturing that we have that are not operating as a merit shop. And that's why I advocate for a continuation of a merit-shop operation at Volkswagen," he said.

But Billy Dycus, president of the Tennessee AFL-CIO, disputed Lee's claims that labor unions hurt a state's economic growth.

"I don't agree that because you have unions, you can't attract business," he said. "We work really hard in labor to make sure that we collaborate with the companies we work with to make sure we retain our competitive edge."

Dycus said the Bridgestone Tire Co. in Warren County, Tennessee, is a unionized plant "and it is the most profitable facility they have in the United States." At GM's Spring Hill plant, Dycus said, the UAW and the company "have collaborated and worked together to save that plant and it's now one of GM's best in the country."

"It's odd that we like to advertise ourselves as a low-wage, non-union state and we fail to realize that we're near the bottom of the country in education and health care. If you want to attract business, wouldn't you want to say that you have the best educated and healthiest work forces as opposed to a non-union or a right-to-work state?" he said.

Dycus said union members are more likely to be paid higher wages and enjoy pension benefits than their non-union counterparts.

According to the U.S. Bureau of Labor Statistics, non-union workers had median weekly earnings averaging $860 last year, or 18 percent less than the $1,051 average weekly earnings made by the average union member.

Lee visited the Chattanooga VW plant last month. A recording of the governor's speech, obtained by Labor Notes, revealed the governor praising workers while encouraging them to vote against the union.

Also, the publication The Intercept said Lee's office has been "secretly assisting Volkswagen's efforts to defeat the United Auto Workers organizing drive," citing emails obtained through the state's public records law.

Lee said Thursday that there were emails with VW about him coming to the Chattanooga plant to speak.

"They invited me to give a speech and we did that," he said. "It's important we have a relationship with them. I was proud and happy to be there."

The Bureau of Labor Statistics estimates that labor union representation in Tennessee is only about half the U.S. average and Tennessee is among the lowest 10 states in the country for union membership.

In Tennessee, the number of workers who are members of a labor union was unchanged in 2018 from the previous year at 155,000. Because in right-to-work states not all workers in a work site that votes to unionize have to belong to the union, labor unions represent 5.7 percent, or 179,000 workers, in Tennessee.

Rothenberg said the VW election is about Chattanooga workers.

"Why would the governor not want Chattanooga workers to have the right to sit across a table and have direct conversation with VW like every other VW employee across the world?" he asked.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

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