Tennessee Governor Tied State Incentives To Outcome Of The VW Union Vote

Volkswagen workers at the Chattanooga, TN plant CREDIT: AP
Volkswagen workers at the Chattanooga, TN plant CREDIT: AP

Leaked documents obtained by NewsChannel 5 Investigates show that Tennessee Gov. Bill Haslam (R) made $300 million in incentives to expand a Volkswagen (VW) plant in Chattanooga contingent on the outcome of a vote to unionize the current plant, an effort he publicly opposed.

The channel obtained a summary of a project that would offer the company those incentives in exchange for building a new SUV facility in Chattanooga and creating 1,350 full-time jobs. But it also reads, “The incentives … are subject to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee.” Volkswagen is in favor of creating a works council, or a formal structure in which workers and management can work more closely together, but the plant would have to unionize first under U.S. labor law. Haslam spoke out against unionization ahead of the vote.

But he has repeatedly denied that there was any connection between the incentives and the vote to unionize.

As talks between VW and the United Automobile Workers union progressed, the administration admits that it withdrew that confidential offer of millions of dollars worth of incentives, although it says the withdrawal came before the vote among workers to unionize was formally announced. However, although a spokesperson in the administration told NewsChannel 5 that the offer had a 90 day deadline and was kept on the table nearly two months after that, the documents it obtained don’t make mention of a 90-day deadline. The spokesperson said that “the offer did not preclude the creation of a works council or union representation as a condition of the incentives.”


The issue carries significance, as after the vote to unionize failed, the UAW filed an appeal with the National Labor Relations Board, calling for the results to be thrown out and a new vote held. The union asserts that a “firestorm of interference from politicians and special interest groups” interfered with the process and made it impossible to have a free election. Richard Trumka, president of the AFL-CIO, has also called politicians’ actions a “clear violation of the law.”

Besides the accusation that Haslam made economic incentives contingent on a failed union vote, the union points to a variety of comments from lawmakers before the vote took place. Many lawmakers hinted at what NewsChannel 5’s documents show. State Sen. Bo Watson (R) warned that a vote to unionize would imperil state incentives for expansion. Haslam said there would be “some ramifications” for the state’s ability to attract businesses if workers voted in favor. And Sen. Bob Corker (R) said VW would build a new line of cars at the plant if workers rejected the union, an idea the company denied.