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Volkswagen Workers Make New Run at Unionizing Tenn. Plant (1)

April 9, 2019, 5:08 PMUpdated: April 9, 2019, 8:18 PM

Workers at a Volkswagen plant in Tennessee are taking another shot at trying to unionize.

The United Auto Workers today filed a petition for a plantwide union election at the Chattanooga factory. The move comes five years after employees narrowly voted down union representation in a fierce election battle that sparked political tensions.

“Chattanooga workers wanted to file and believe they will succeed and the UAW believes in them,” said union spokesman Brian Rothenberg. The union says it wants to hold the election April 29-30.

The new election is the latest effort for labor organizations to get a foothold in the South. It follows failed attempts to unionize a Nissan assembly plant in Canton, Miss., and at a Kumho Tire facility in Macon, Ga.

VW workers voted 712-626 against unionization at the Chattanooga plant in 2014. The company, whose workers in Europe have long been represented by labor organizations, agreed to remain neutral during that contest. It also agreed to support the creation of a German-style works council, which would have tackled issues not required to be collectively bargained had the workers voted to unionize.

UAW’s Rothenberg said it’s “too soon” to say whether the union and the company will reach a similar deal this time around. Volkswagen representatives didn’t immediately respond to Bloomberg Law’s request for comment.

The union challenged the elections results, telling the National Labor Relations Board that former Tennessee Gov. Bill Haslam (R), former Sen. Bob Corker (R), and other officials interfered in the election by suggesting that unionizing the plant could cost the company $300 million in incentives. The UAW, which later dropped the challenge, also said plant workers were bombarded with messages and misinformation from Grover Norquist’s Americans for Tax Reform and other outside groups.

Unions have had some recent success organizing smaller groups of workers within plants, like at a Boeing facility outside of Charleston, S.C. A group of more than 170 flight-line workers voted last year to unionize. The company is fighting that election, arguing that the unit was illegally “gerrymandered” from a group of more than 7,000 workers at the factory.

The UAW in 2015 won an election to represent a group of 260 maintenance workers at the Chattanooga plant. Volkswagen is challenging that election in a case before the labor board.

Political ‘Thumb on Scale’

The 2014 election was closely watched because of the heated political debate it created, despite Volkswagen’s pledge not to oppose unionization.

Steven Swirsky, an attorney who previously represented Volkswagen, and Carsten Huebner, who was a staffer for a Volkswagen works council at the time, recently talked about the 2014 election during an event at New York University. They described it as a largely collaborative approach. Both sides eventually signed an agreement laying the groundwork for a “dual model,” including union representation and a separate works council delegated to handle certain issues often left to bargaining.

“I think the real achievement in this is that the dual model was something that both the company and UAW felt comfortable in having and wanted to be made public to the workforce in the plant before the election took place,” Swirsky said April 5. “It was not a pre-negotiated collective bargaining agreement. I would say in some ways it was like a framework agreement.”

But Swirsky and Huebner also cited the role that Tennessee government officials played in the outcome.

“One of the things that was in the fulcrum at the time was, is this plant going to expand and is it essentially going to double capacity and double employment,” Swirsky said. “When you have people from the state legislature who have to approve the bond packages and the tax incentives saying, ‘We won’t do it if the union wins the election,’ it was a big thumb on the scale.”

Corker and Sen. Lamar Alexander (R-Tenn.) in a September 2013 letter to then-Volkswagen Chairman Martin Winterkorn said company officials had made clear to lawmakers that they would “resist” unionization efforts in Chattanooga.

“Despite that understanding, we have been very disappointed to learn that there are active conversations going on between Volkswagen and the UAW,” Corker and Alexander said in the letter. “While we know you are aware of our views on this subject, we want to reiterate how concerned we are about the damage we believe will be caused to Chattanooga, the state of Tennessee, and over time possibly the entire southeastern United States if you invite the UAW to organize the plant.”

A spokeswoman for Alexander, the top Republican on the Health, Education, Labor, and Pensions Committee, didn’t immediately respond to a request for comment.

Documents leaked after the election showed that Haslam’s office offered Volkswagen $300 million in incentives like infrastructure, worker training, tax credits, and tax exemptions for creating the plant. That offer came with a caveat: “The incentives described below are subject to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee.”

Haslam and his staff later expressed concerns to Volkswagen that groups opposing the union drive weren’t getting the same access to the Chattanooga property as the UAW. Meanwhile, Tennessee state Sen. Bo Watson (R) said a week after the company and the union signed the agreement that it could cost Volkswagen the incentives package.

“I believe the members of the Tennessee Senate will not view unionization as in the best interest of Tennessee,” Watson said at the time. “The Governor, the Department of Economic and Community Development, as well as the members of this delegation, will have a difficult time convincing our citizens to support any Volkswagen incentive package.”

A spokesman for Watson didn’t immediately respond to Bloomberg Law’s request for comment.

—With contributions from Josh Eidelson

To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com

To contact the editors responsible for this story: Simon Nadel at snadel@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com