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VOL. 39 | NO. 1 | Friday, January 2, 2015

Chattanooga lawmakers raise questions over incentives for VW

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NASHVILLE (AP) — Gov. Bill Haslam says he understands the "real concerns" raised by some fellow Republican lawmakers about the ongoing role of the United Auto Workers union's role at the Volkswagen plant in Chattanooga, but stressed that they shouldn't sink a $300 million incentive deal to get the German automaker to expand production there.

Haslam, who last summer struck the incentives deal with Volkswagen to add the production of a new SUV at the Chattanooga plant and add about 2,000 jobs, told reporters Wednesday that his administration will work to persuade reluctant lawmakers to agree to the arrangement.

"You have some real concerns expressed by legislators that we understand — we expressed those same concerns up front as well," Haslam said. "We'll have those discussions about where we think Volkswagen is and why we think this is the right proposal for the state."

Republican members of the Chattanooga-area delegation like Rep. Mike Carter and Sens. Todd Gardenhire and Bo Watson told the Chattanooga Times Free Press (http://bit.ly/1wUWEeq) that Volkswagen's labor policy providing a formal role for the UAW at the plant is giving them pause.

The incentives require legislative approval, but Carter says he approaches that decision with a "jaundiced view."

Watson last year warned that incentives could be rejected by the GOP-controlled Legislature if the union won a plant-wide vote. The union ultimately lost the February vote, but has since qualified for the top tier of a new labor policy at the plant that guarantees the union regular meetings with management and access to meeting space. The policy does not include collective bargaining rights.

"At the end of the day, we'll settle on what is in the best interests of the citizens," said Watson. "Each individual legislator will take a position that best represents his district."

Gardenhire criticized VW for keeping the door open to the UAW.

"It's their way or no way. They've decided by-golly they want the UAW here," he said. "They're not listening to the community."

Haslam acknowledged that the Hamilton County lawmakers will have added sway in the legislative debate over the incentives.

"Obviously, any legislation comes up, the home legislators for that issue tend to have more influence than others, and so the vote of the Hamilton County delegation on that will be important," he said.

Haslam said "there's no question" it would become more difficult to strike future economic development deals if lawmakers were to torpedo the deal with Volkswagen.

"Now we always put that as a caveat to the deal that the Legislature has to approve it," he said. "But historically, that has always happened in Tennessee."

Volkswagen has long called state and local incentives key to the expansion, and a legislative failure to approve them would likely cause the vehicle to be built elsewhere and possibly threaten the future of existing production at the plant.

The American Council of Employees, a rival labor group lead by anti-UAW workers has so far failed to qualify under Volkswagen's labor policy. Members of that group have complained that Volkswagen has not offered a "level playing field" by favoring the UAW.

Volkswagen denies having a preference for any one labor group.

"If ACE wishes to utilize the ... policy to engage with the company, we welcome it and have invited them to do so," said plant spokesman Scott Wilson. "So far, they have chosen not to participate."

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