Governor: VW unionization would hurt odds of expansion here

If Volkswagen decides to pair up with the United Auto Workers union, the outcome may not bode well for the company expanding operations in Tennessee, said Gov. Bill Haslam.

Haslam sat down with high-ranking Volkswagen labor official Bernd Osterloh this week where he heard about the culture of the German company’s works councils before pushing back against VW working with the UAW to create them. 

VW is mulling whether to build a new SUV in Tennessee or Mexico at the same time it hears state political figures discourage the company from engaging with the UAW. Under U.S. law, the way to develop works councils — which are dear to VW and used in all its plants besides its sole U.S. location in Chattanooga — is through a third party union.

But while Osterloh told Haslam said this week the company’s decision where to expand will be based on labor costs and access to suppliers, the governor argues a decision to pair with the union will indirectly affect the viability of expanding operations in Tennessee.

“It’s hard to consider a scenario in which labor costs are helped by the UAW coming in,” said Haslam in describing what he considers the cons for VW. “And I know that bringing suppliers close will be more difficult. We’ve heard that from suppliers we’ve been working with, saying if UAW comes, ‘I don’t think we’ll locate one of our facilities near the Chattanooga plant.’”  

The conversation between the governor and labor leader comes after months of building tension over working with the union, including debate within the plant over votes on whether to unionize.