Volkswagen Labor Leader Vows To Stop VW's Investment In Tennessee & The South

February 19, 2014

Earlier this week, we reported that, despite years of campaigning by the United Automobile Workers, employees at the Volkswagen plant in Chattanooga, Tennessee voted against unionization. If the decision had gone the other way, employees would've created a "works council" similar to the kind found at most VW plants around the world.

The UAW was understandably disappointed with the results and said that it would think long and hard about the organization's next steps. That's a rational, reasoned response in the wake of a losing vote.

The head of Volkswagen's works council in Germany, however, hasn't taken the loss so well. According to AutoNews, labor leader Bernd Osterloh is threatening to prevent any new VW facilities from opening in the largely anti-union American South. Specifically, Osterloh said that, although it makes a great deal of sense for VW to open a new plant in the U.S., that facility "does not necessarily have to be assigned to the South again".

Osterloh's threat isn't an idle one. Labor unions work differently in Germany, and they wield considerably more power than in the U.S. Case in point: Osterloh and nine other labor representatives sit on Volkswagen's 20-member supervisory panel. The ten remaining seats are held by management. Every decision regarding the opening of new facilities has to be voted on by the panel, and if Osterloh's labor pals feel as strongly as he does, they could prevent new plants or expansions from opening in Tennessee -- or elsewhere below the Mason-Dixon.

Is VW planning to expand or open new facilities in Tennessee? According to Senator Bob Corker (R-TN) it is, indeed.

The senator said that he was assured that if the union vote failed in Chattanooga, VW would build its new "Hail Mary" SUV in the state. If what he says is true, it would almost certainly require VW to build a new plant in Tennessee, or, at the very least, expand the Chattanooga facility. Either of those options would need approval from VW's supervisory panel -- the one on which Osterloh sits. (For the record, VW hasn't said anything about where the SUV will be built, only that it will be sold in the U.S. beginning in calendar year 2016.)

Of course, there are a lot of "ifs" at play here: "if" what Corker says is true, "if" Osterloh's labor colleagues feel as strongly as he does, "if" no concessions are made in the meantime. We'll let you know when -- and if -- any of them come to pass.


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