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Union Foes Tie Chattanooga Volkswagen Vote to Detroit Woe

Opponents including a Tennessee U.S. senator are warning employees that voting for the United Auto Workers at a Volkswagen AG (VOW) assembly plant in Chattanooga would bring the kind of economic malaise that crippled Detroit.

Balloting ends today for about 1,550 workers at the plant where Volkswagen managers pledged to stay neutral before the vote. Republican U.S. Senator Bob Corker this week stepped up his criticism by saying the UAW will destroy jobs while boosting its sagging ranks to collect dues from new members.

“If you look at the reputation the UAW’s left behind them, if you look at Detroit, how many companies from South Korea or Japan or Germany, how many of them you think make a stop in Detroit to look at locating there?” Corker said at a news conference this week. “I don’t think our employees, the wonderful people we have at the Volkswagen plant, I don’t think they fully understand the type of culture that the UAW creates inside a facility.”

A victory for the UAW would make the Volkswagen plant the first foreign-owned car factory in the U.S. where workers joined a labor union and give the UAW a long-sought foothold in the anti-union South. Outside lobby groups, including an organization tied to anti-tax crusader Grover Norquist, placed billboard ads and wrote editorials in local newspapers to build opposition to the UAW.

Matt Patterson, executive director of the Center for Worker Freedom, part of Norquist’s anti-tax group Americans for Tax Reform, said his goal is to highlight the UAW’s poor economic legacy and its advocacy for “highly partisan, left-wing” politicians.

‘Visceral Arguments’

Such comments may appeal to workers who distrust unions and are fearful of losing their jobs, said Gary Chaison, a labor law professor at Clark University in Worcester, Massachusetts.

“What they’re doing is saying the UAW will cost you your job, the UAW will make Chattanooga into Detroit,” Chaison said in an interview. “They’re taking the most visceral arguments and they’re presenting them to the workers.”

Detroit, the 18th-largest U.S. city, filed the largest-ever U.S. municipal bankruptcy in July, saying it didn’t have enough money to cover $18 billion in liabilities while also providing adequate police, fire and other services to the city’s 700,000 residents. Unemployment in the metropolitan area was 8 percent in December, compared with 6.7 percent that month nationwide.

A majority of the workers at the Chattanooga plant signed authorization cards to join the UAW, though the exact number wasn’t made public. Voting under supervision of the U.S. National Labor Relations Board ends at 8:30 p.m. local time. It’s not clear how long it will take to declare a winner.

Member Loss

Balloting follows an accord between the UAW and Volkswagen to negotiate the formation of a German-style works council, an employee body common at most large German companies to resolve labor disputes. None exists in the U.S. Under U.S. law, a union must be in place before a works council is created.

The UAW, which has lost 75 percent of its membership since 1979, has pushed to gain recognition at Volkswagen’s Chattanooga plant.

“I think it will be a tremendous success story for American labor, for Volkswagen, what labor management can do together if they’re determined to work together,” UAW President Bob King said Feb. 12 in an interview on MSNBC.

Corker isn’t alone is faulting the UAW. Tennessee Governor Bill Haslam, a Republican, said he tried to discourage Volkswagen from backing a union, warning that a UAW win will discourage companies from investing in a state where 6.1 percent of workers were union members in 2013.

‘Anti-Unionists’

The $1 billion plant opened in 2011 with incentives from Tennessee. Future state aid would might vanish if workers join the UAW, State Senate Speaker Pro Tem Bo Watson said at a news conference this week. Letting the UAW into the plant is “un-American,” he said.

“These are militant, anti-unionists,” Lowell Turner, director of The Worker Institute at Cornell University in Ithaca, New York, said in an interview.

Corker, who said he missed votes in Washington to be in Chattanooga this week, said Feb. 12 that a vote against the UAW would play a role in Volkswagen’s choice of Chattanooga as the site to build a new sport-utility vehicle for the U.S. market. Corker was contradicted by Frank Fischer, chairman and chief executive officer of Volkswagen Chattanooga, who said the vote will have no bearing on where the new SUV is built.

“Should the workers vote against the UAW, Volkswagen will announce in the coming weeks that it will manufacture its new mid-size SUV here in Chattanooga,” Corker said, citing conversations he had about the plant with officials he didn’t identify.

‘Intimidate Workers’

Tennessee Republicans “all tried to intimidate workers,” King said in the MSNBC interview. “This campaign was built on workers in the Chattanooga plant. All the cards that were signed were collected by workers in the plant.”

At General Motors Co. (GM)’s Spring Hill, Tennessee, plant, the UAW worked “hand in hand” with management on an agreement that paved the way to build the Chevy Equinox, said Mike Herron, the top UAW official at the plant.

“The doomsday effect of the union coming into Chattanooga is just absurd,” Herron said in an interview. Corker “knows darn well that there’s a success story here.”

Chaison said union gains in Tennessee may hurt future investment in the state. Some companies moved to the U.S. South “to avoid a high probability of becoming unionized,” Chaison said. “If the Volkswagen plant becomes unionized, suddenly the odds have changed.”

The decision will come down to people such as John Wright, a member of the team that test-drives cars before they leave the factory who said he will be glad when the spotlight shifts away from Chattanooga.

“Why can’t you let me make my choice for myself,” Wright said in an interview. “Why do I need you coming down here spending hundreds of thousands of dollars, beating the average worker over the head telling me how dumb I am.”

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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