By on August 4, 2013

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This weekend was the end-of-summer graduation at Auburn, and like all such events, it brought an avalanche of rental cars to our Loveliest Village on the Plains™. Amidst the ubiquitous Chryslerbishis and engineering-excellence-cum-fleet-staple Camrys, I spotted a couple of newish Jettas and Passats wandering about town, crooked rental bar stickers applied with obvious indifference. I saw one particular rental Jetta sitting in the parking lot not far from the bookstore when I went to pick up some cut-price tomes. Coated in dust and wearing those ugly DUI-style New York plates, it was a forlorn sight. I couldn’t help but think of it as a reminder that the road to hell can be paved with tax breaks as often as it’s paved with good intentions; at least that’s the case if you happen to be governor of Tennessee.


TTAC has covered the increasingly murky labor situation at Volkswagen’s Chattanooga facility for some time now, but the extent of the looming political crisis didn’t become clear until rather recently. At the end of May, VW shed 500 jobs at Chattanooga in response to the Passat’s disappointing performance in the marketplace; the ripple effect of such a move on the assembly line undoubtedly cost hundreds more their livelihoods. This comes at a time when the future of worker representation in Chattanooga is very much up in the air, much to the consternation of almost all parties involved.
Despite the best efforts of our own TTAC reporters, nobody seems to know what the hell a “works council” actually is or how it would function in a US environment that may or may not explicitly prohibit such arrangements. The only real point of agreement is that, if such a council were implemented, it might be a gateway to *gasp* UNIONS! The invocation of the dreaded (or lauded) u-word is sending all kinds of political groups into a tizzy, with a resulting wave of cash now blanketing Tennessee with pro- and anti-propaganda. The UAW’s presence in the area is well known, but conservative groups of varying stripes have also set up camp around town. Tennesseans are probably already familiar with the billboards at the top of article, funded by the Competitive Enterprise Institute: one of the moneybags “think tanks” that seems to do all the talking for political interests nowadays. However, I couldn’t help but excerpt a little something from an essay on the CEI website:

One hundred and fifty years ago an invading Union army was halted at Chattanooga by the Confederate Army of Tennessee under General Braxton Bragg. The Battle of Chickamauga was one of the bloodiest days of the entire Civil War, and a resounding defeat for the Northern forces. Today Southeastern Tennessee faces invasion from another union— an actual labor union, the United Auto Workers (UAW)… One hundred and fifty years ago, the people of Tennessee routed such a force in the Battle of Chickamauga. Let their descendants go now and do likewise.

Umm, yeah. Somehow I doubt that one is going to make its way into the hands of Chattanooga’s black employees, unless it comes to them from a UAW organizer. But let’s not get too hung up on gung-ho neo-Confederate lunatics; let’s talk about money.
In response to layoffs, the Tennessee legislature passed S.B. 0605, the so-called “clawback” bill. At the core of that lengthy document is a new provision designed to allow Tennessee’s Department of Economic and Community Development to withhold state financial incentives for corporations that fail to materialize their promises of jobs. Presumably, that would include VW, although in typical toothless-regulation fashion left the final discretion on whether or not to implement clawbacks to the DECD itself. Now that the legislature has safely washed its hands of responsibility for managing yet another enormous chunk of taxpayer money, DECD bureaucrats can feel free to shower VW with public money in a desperate bid to keep overpriced jobs in the state. Bud Adams is no doubt cackling with approval somewhere.
And let’s not beat around the Jetta here; we’re talking about some serious cash. Five-hundred-and-seventy-seven million dollars in total incentives. As this Tribune reporter pointed out, that makes what Pennsylvania paid for the privilege of getting a dysfunctional VW factory in New Stanton for ten years look like peanuts. Ah yes, New Stanton! In the interest of full disclosure, let me tell you that I’m planning to do a full book-length dissertation on that plant as the culmination of my graduate-school research, so I’ll avoid ruminating on it too much for now. A few basic historical facts will suffice to make my point. New Stanton was the first of all the modern, foreign-owned auto factories. It came with a package of incentives that caused quite a bit of controversy in its day, mostly because of its size. It opened at a time when VW was on a serious downward swing in the American market, and it needed to start building competitive products, fast, to reverse that decline. Instead, it opened to much fanfare, seemed like it might work out for a few years, and then collapsed under an avalanche of quality problems, labor trouble, and good old fashioned competition just 10 years after it opened. It was the only transplant to ever be unionized, and that legacy has led to furious debates about the impact of unionization on competitiveness in the auto industry ever since the last Jetta rolled off the assembly line.
My point isn’t that unions killed New Stanton, or that VW is a terrible company, or that conservatives have no right to make their opposition to unionization known, or some other partisan and easily-countered nonsense. My point is that Tennessee politicians had the entire legacy of VW in the United States staring them in the face, and they chose to roll the dice anyway. They couldn’t have not known about New Stanton. They couldn’t have not known that VW nearly quit the US market in the mid-90’s after getting their lunch eaten by the Japanese just as badly as the Big 3 had. They couldn’t have not known that despite all the hoopla surrounding the New Beetle and the “resurgence” of the early 2000’s, VW was still but a small fish in a very big ocean. They couldn’t have not known that VW has a long history of building products whose quality and reliability left something to be desired (like window regulators that weren’t made out of used bubble gum, or sunroofs that worked, or head bolts that were actually torqued properly.) Now that VW has been consistently underperforming in an up market, fleet sales are high, and quality problems continue to plague Chattanooga’s products, it should be an easy call to see that history might just be repeating itself yet again. Right, Senator Bob Corker?

“Volkswagen is a good company, and it didn’t make those mistakes” such as were carried out by the Detroit Three, he said.

Guess not. So here we have a man who despises the UAW and blames them for the collapse of the domestic automakers, while at the same time cheerleading for a troubled auto company in his home state that made exactly the same “mistakes” and faced the same obstacles that, in his own opinion, killed Detroit. So either he’s totally ignorant of VW’s record in the US (likely), or simply lying through his teeth to cover his own ass about the feasibility of this deal ever paying off (also likely). Truth be told, it doesn’t matter if the UAW comes to represent the workers at Chattanooga or not. Corker’s already lost, as has Governor Bill Haslam and all the other politicos that pushed this particular bit of corporate welfare to their citizens. The VW dream of a happily expanding company that doles out paychecks to grateful, un-unionized citizens while taking subsidies out of their back pockets has already been shattered. If unions arrive in Chattanooga, Tennessee’s political elite will have nobody to blame but themselves. I have a feeling they could have avoided this mess just by doing a little homework.

Correction: This article incorrectly attributed a quote to Senator Bob Corker, which should have been attributed to Professor Lowell Turner of Cornell University. TTAC apologies for this error.

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63 Comments on “You Can Only Have Second Thoughts if You Had a Thought to Begin With: A Chattanooga Story...”


  • avatar
    JD23

    Nice to see that TTAC is balancing out the right-wing political rants that are only tangentially related to cars with left-wing political rants.

    • 0 avatar
      noreaster

      Is that left wing? It sort of defends unions, but giving away money and distorting the free market doesn’t seem like a conservative idea no matter who does it. But then I get confused by the whole “left” and “right” thing anyway. Which side is pro free-speech again? Which side is pro privacy? Which side is in bed with big business?

      • 0 avatar
        wstarvingteacher

        I find it pretty hard to respect anyone in this story. There is plenty of polysci in my educational background and I don’t think this is left or right wing oriented. It looks to me as though J Emerson has just reported a story and done so pretty well. I confess I don’t know a lot about VW in America because I quit owning them when the failures became more expensive. It’s pretty hard to own a modern car thats out of warranty when you have a fixed income. I do think this has a place on TTAC because it will have an impact on the automotive landscape.

        • 0 avatar
          noreaster

          Agreed, on all points. BTW, I have a VW Phaeton, and am on disability myself now. Bought it, actually, because I thought I’d die before it needed much work. Didn’t turn out that way. The point is, you’re right about that too. Maintenance and repair costs == ouch.

        • 0 avatar
          Luke42

          I agree. I found the article to be insightful and informative.

          The author’s background as both a lawyer and a car enthusiast are a great match for the topic.

          JD23′s trouble to fitting this story into the right-left narrative says more about that narrative’s inability to explain the complexities of the real world and actual human behavior than anything else.

          • 0 avatar
            galloping_gael

            +1. Nice job, J.Emerson.

          • 0 avatar
            tonycd

            +2

          • 0 avatar
            JD23

            I have no problem with the column’s thesis, but it had an unnecessarily partisan tone and would have been more effective if it had presented the facts more dispassionately. I would have liked to see the data that was used to justify the $577 million in incentives and how far the actual economic impact in Chattanooga has underperformed those projections. Instead, there was the red herring of an opening involving unions and “neo-confederate lunatics” with little new information in the subsequent paragraphs.

          • 0 avatar
            wstarvingteacher

            I really do not have a dog in this fight. Don’t know or care if the author and I are socially compatible. Do know though that when one compares Braxton Bragg and Chicamauga to the modern attempts of the UAW to unionize, you have earned the title Neo Confederate Lunatic. The events of the past few years have convinced me that there are plenty of lunatics on both sides. I am further convinced that I like hardly any of them.

          • 0 avatar
            Luke42

            @JD23:

            You’re assuming that the author is only going to criticize one side of the right/left debate.

            My father-in-law is a recently retired lawyer, and I’ve learned that practicing lawyers spend their days watching people who should know better doing legally-idiotic things. It is their professional responsibility to call out and correct this kind of behavior, usually for hire.

            I get the same sense that I get from this article.

            Right/left politics doesn’t have anything to do with that. Also, in real life, employment and education are extremely popular with both liberals and conservatives, and for mostly the same reasons. So, politicians from both sides of the political spectrum will perform whatever contortions necessary to deliver those things. Including, of course, giving tax breaks to the world’s most profitable companies, because having jobs that bring money into a community really does make the people better off.

    • 0 avatar
      highdesertcat

      JD23, I’m a political Independent and I take issue with your comment simply because political rants from either side are the result of how each side faces/views a situation.

      In short, VW had a great thought when it came to providing much-needed jobs to Americans, building cars in America, at a lower labor-expense to VW. Just like Toyota, Honda, Nissan, Hyundai/Kia, Subaru, Mercedes, BMW et al have been doing when setting up shop in America.

      I hope that VW is not going to muck things up by forging an alliance with the UAW.

      That doesn’t make me right wing or left wing. From my perspective, the UAW has done more to destroy the American auto industry than the efforts of ALL of the foreigners/transplants combined.

      A great illustration of how the UAW has been marginalized is Fiatsler under the management of Sergio and the Fiat BoD. Sergio had to accept the UAW as part of the $1.3B bribe from the US government but he doesn’t have to give them any power, thank God!

      The UAW seats on the board are a mere formality and carry no weight whatsoever. Their input is sh!tcanned before they finish presenting it to the board.

      The Fiatsler decisions are made by the core that does not include the UAW reps on the board. Sergio marginalized them at the onset because the UAW is what drove Chrysler bankrupt. The UAW is about as useful in this day and age of government regulations and mandates as used toilet paper.

      If the UAW gets its way with VW, and VW lets them, the UAW will do its best to drive VW in America into financial failure, and then all those jobs in America will be lost as well, when VW is forced to close down its plants in America.

      There’s plenty of precedence to support what I have written. This article just puts some perspectives in print. Yes, the UAW won’t like it but there may be some independent thinkers who will like it. You call it as you see it.

      We need these jobs in America! What we don’t need at some point in the future is the UAW killing the profitability of this employer by collectively bargaining them into the financial grave like they did GM and Chrysler.

      • 0 avatar
        billfrombuckhead

        Yeah, the UAW killed Chrysler after they were the most profitable car maker in the world when Daimler took over, it wasn’t terrible management and theft by Jurgern Schempf.

        • 0 avatar
          highdesertcat

          Daimler gave Chrysler, and in-turn Fiat, a lot more than it took from Chrysler.

          To wit: the refined 300, the M-Class based Grand Cherokee and the reworked RAM.

          I own a 2012 Grand Cherokee Overland Summit and am highly pleased with it. More so than I ever thought I would be with any crap car from Chrysler.

          Talk about a 180 for Chrysler! All thanks to Daimler.

      • 0 avatar
        el scotto

        “What we don’t need at some point in the future is the UAW killing the profitability of this employer by collectively bargaining them into the financial grave like they did GM and Chrysler.” You glaringly forgot Ford. You don’t seem to understand the word bargaining; it TWO sides. Do you really think the Big 3 looked at the UAW and asked “how far and high do we jump?” This is a large bucket of right-wing-unions-are-evil claptrap that would make spritely conversation at the next Neo-Confederate Lunatic Lemonade Luncheon. I really don’t give two shits how many of the B&B I piss off defending just about any union. Yes, even the Teamsters. Am I clear on this? The UAW and other unions helped put a lot of Midwestern kids through college, helped workers buy retirement houses, and set aside some money and well; live out the American dream. If anyone wants to get on here and go: Unions Are Evil” (I’m a dumbass); “I’m older now and Unions Are Still Evil” (and I’m still a dumbass). Please continue to speak your blatant bias. Good Day Sirs.

        • 0 avatar
          highdesertcat

          You may have missed that my dad was a Democrat AND a Union man for decades but even he grew weary of what the union did for his trade when calling for strikes in order to get their way.

          My dad was fortunate in that he was able to break the stranglehold the union had over its membership and their employers by finding a better paying job with more bennies working for the federal government.

          There are always at least two sides to any issue. You’re on one side and I’m on the other.

          I’ve seen both sides and that’s why I hold the beliefs I have, based on my own experiences.

        • 0 avatar
          Hummer

          Scott, the only people unions help in this day and age, are those to lazy to do the work asked of them for their pay.
          There are no legitimate reasons for unions to exist, they prop up those who have no business even having a job, hurting those who actually want to work.

      • 0 avatar
        FreedMike

        God, where to begin with this?

        1) The question of whether VW’s workforce should be unionized isn’t up to VW to decide – it’s up to their employees. That’s the law.

        2) The UAW didn’t design, engineer or market cars that performed poorly in the market place – management did. Did the big bad unions put a gun to GM and Ford’s head and force them to continue to build mid-size and compact cars – better known as the volume sellers – with 1980s platforms and engines for DECADES? Did they strike GM and Ford for deciding to plow billions in profits they made in the 1990s and early 2000s into buying competitors, versus improving their product? In fact, when was the last UAW strike? I can’t even recall a major one in recent memory. The last major one I can think of was in 1998 – a LONG time before the Big Three failed. They struck in 2007, and the result was concessions on the union’s part. Your point has validity if you look at the history of the car industry through the 1970s, but a lot of those issues were solved 25-30 years ago. The recent failure of the U.S. car industry was almost all from self inflicted wounds.

        3) Glad you like your Grand Cherokee. Aside from that, and some COMPONENTS on the 300/Magnum, Daimler’s involvement was an unmitigated disaster, and that’s being politically correct. Non PC interpretations of what Daimler did to Chrysler tend to involve forced sex allusions. It was Daimler who insisted on using the shared Mitsubishi “America” platforms for ALL its compact SUVs, and compact/midsize cars. None of these were even remotely competitive, and most outright bombed, or underperformed at best. Could this have had something to do with the company’s demise in the late 2000s? Nawwwww…couldn’t be, right? And as far as Ram trucks are concerned, I seem to recall Chrysler having a very successful full size truck business a LONG time before the “merger of equals.”

        But I suppose that would have taken some research. Easier to just blame unions for the whole thing.

        • 0 avatar
          highdesertcat

          FreedMike, I completely understand your position! But I don’t agree with you.

          One of the guys I play poker with feels the exact same way. He was employed by a Chrysler supplier way back when and took a buy out years ago. He thanks that buyout for enabling him to move to New Mexico, buy land, build a house and start a small business here.

          That’s what makes America so great. We can each have our own beliefs and opinions.

          And of course only time will tell if your presumption of “a merger of equals” will reveal which equal is more equal than the other and which equal calls all the shots at Fiatsler.

      • 0 avatar
        musiccitymafia

        @highdesertcat “political rants from either side are the result of how each side faces/views a situation” … ummmm, Nope.

        Since neither side actually stands for anything it’s much easier (and fun) to measure political rants given by a side against the perception of how the side is perceived to face/view a situation.

        Comparing the other sides’ statements versus perceptions can never be wrong hence ranting will never cease. Sort of like playing Groundhog Day over and over again.

    • 0 avatar
      billfrombuckhead

      Many southerners will never admit they lost the war of southern rebellion, they live in some fantasy world where they didn’t get their asses kicked. Germany is the world’s greatest manufacturer and exporter but yet the backward state of Tennessee would rather listen to Tea party know nothings and crooks like Corker. It’s hard to feel sorry for the south having worse healthcare than Cuba or other third world quality of life issues. But they do have guns in the VW plant parking lot in case Obama comes hunting them with drones. Heck if the rightwing idiots keep hurting America, someday Chinese billionaires kids will hunt them, their Confederate battle flags and their guns down remotely with drones in some video snuff game. That’s kind of what Gore Vidal thought would happen.

      • 0 avatar
        George B

        Bill, how is US Senator Bob Corker relevant to state and local incentives for VW to build an assembly plant in Chattanooga? Corker used to be mayor of Chattanooga, but he wasn’t there when VW built the plant. To be fair, I wouldn’t be surprised if Mayor Corker was involved in the long process to convert the Volunteer Army Ammunition Plant into the Enterprise South industrial park, but he wasn’t around to decide on the dollar amount of the incentives. Guess mentioning Gov. Phil Bredesen is a Democrat and that the Chattanooga Tea Party led an unsuccessful attempt to recall Mayor Ron Littlefield, Republican, didn’t fit the narrative. Tax increases following the VW deal caused the effort to recall the Chattanooga mayor.

        http://www.timesfreepress.com/news/2008/jul/24/chattanooga-vw-incentives-largest-state/

        http://www.timesfreepress.com/news/2010/aug/29/recall-election-may-offer-quick-path-office/

  • avatar
    LeeK

    Alabama did the same with Mercedes Benz, and South Carolina the same with BMW, providing enormous tax breaks to get the auto manufacturers to build a plant in their state. North Carolina gave up millions to have Dell Computer build a facility in the state, yet several years later Dell closed it down, leaving the legislature with egg on its face. It’s what states do, to entice investment in their state with the promise of jobs for their residents.

    The piece above implies that VW, the third largest auto manufacturer in the word, is somehow not being worthy of being wooed by states hoping to get them to come and build a factory. If Tennessee hadn’t done it, it could have been Arkansas or Mississippi. The equation is simple, actually. VW, after decades of poor sales performance in the US, wants to turn that around. They have to build more affordable cars in order to compete in the brutal US market, and years of touting “German Engineering” simply showed that US customers aren’t willing to pay the premium. So VW designed lower cost cars for the perceived different tastes of the less-discriminating US customer. And guess what? Sales volumes doubled. The automotive press dinged the NLA Jetta because of hard touch plastics, Torsion beam suspension, and drum rear brakes. But they sold. And VW’s market share went up. Much as we like to think that cool CCs and Euro-featured Golfs would be the rage here, that simply isn’t the path forward for VW. To be other than a niche player in the US you have to go head-to-head with the Cruze, Focus, Corrolla, Civic, and Sentra.

    Finally, will somebody please take a look at the latest Consumer Reports and JD Powers reliability ratings by manufacturer (as a whole)? Audi and Porsche rate near the top. VW is in the middle, right next to Huyndai. Chrysler, Mitsubishi, and Land Rover consistently rank worse, yet the anecdotes of ten year and older VWs will surely be posted here with a vengeance. Make no mistake, the Mark IV Jetta/Golf/New Beetle platform of the early 2000s was a mechanical and electronic nightmare for many. But VW has fixed that, and continues to slowly climb in the reliability ratings. Ask Michael Karesh at True Delta.

    VW needs more product. The Tiguan is too small and too expensive to break the CR-V/RAV4 stranglehold. A new one is coming. The Passat is a decent and roomy vehicle, but the competition from the Camry/Accord juggernaut is fierce, particularly with the Fusion just a notch away.

    Poster Hreardon made an interesting comment about VW’s plight in an earlier article here on TTAC. His keen observation is that VW’s mistake has been underestimating how good the competition has become. After a rare stumble by Honda with a decontented Civic and bloated Accord, they realized their mistake and have come roaring back. It is in these trenches that VW will either lose or win the war. And in Tennessee, VW has such deep pockets that they will simply outspend any attempts at unionizing. And there’s always that teeming Puebla plant just a thousand miles away.

    • 0 avatar
      Luke42

      You’re going to have to provide a link to that JD Power study.

      I owned a 2001 Jetta, you see, and it was only 6 years old and had only 100k miles on it when I bought it. I loved it, but I will never own such a poorly designed and unreliable piece of junk again. Transmissions that only last 50k miles and can’t be properly rebuilt in the field just aren’t acceptable! Especially when Ford and Toyota both make far better cars for less, in my personal experience.

      While I can believe VW does OK on initial quality, I would be shocked if they managed to last as long as a Hyundai. I expect Hyundai goes a lot farther between 4-figure repair bills. If only Hyundai sold TDIs…!

      • 0 avatar
        LeeK

        Right here from TTAC:

        http://www.thetruthaboutcars.com/2013/02/toyota-beats-gm-74-in-j-d-power-dependability-study-volkswagen-decimated/

        Consumer Reports’ reliability survey (which is a lot more trustworthy — see deiscussion above) is locked behind subscriber requirements, but tha April 2103 issue ranks VW one point below Huyndai. at 12 out of 18.

        • 0 avatar
          tedward

          Yeah but I’m, right now, looking at the recent Consumer Reports were basically every VW is average or slightly above. Not bad at all when you compare like for like technology wise (DI engines etc…), even better when you look at their tech. equivalent product (2.5).

          It’s also a great brand to use as a control for enthusiast driver demolition arguments. Why oh why else would you see a disparity between the GTI and CC sport (among many other examples).

          When CR ranks entire brands it has the same flaws as any other entity doing so (all Honda’s/VW’s/Toyota’s are…). What’s the point of that? Is it just for that especially ignorant and lazy consumer who refuses to do any research beyond picking a badge and showing to up to be up-sold a stagnant and overstocked vehicle by a contemptuous salesman?

          I have exactly the same problem with VW guys calling all Korean cars unsafe because of a 6 year old video of one vehicle on the IIHS website.

          • 0 avatar
            LeeK

            I agree with you Ted, the overall manufacturer ratings aren’t the best way to measure this kind of thing, but I don’t know how else to convey the message that 1. The overall industry reliability ratings have improved so cars in general are increasingly trouble-free, and 2. Volkswagen’s reliability ratings inside that overall industry rating measurement is slowly but steadily improving. In the 2012 J. D. Powers Three-Year Reliability survey they were next to last (still working off 2009 New Beetle, and B6 Passat, and T2 Touareg models — all of which were not very reliable vehicles). The 2013 J. D. Powers Three-Year Reliability survey shows VW moving up (separate from Porsche and Audi) three spots as the newer Mark VI Golf and American Jetta began to be sold in 2010.

            Will VW ever be able to break the stigma of the early 2000s with the Mark IV Golf/Jetta, New Beeetle, and B5 Passat? Window regulator failures, electrical issues, transmission failures, and coil-pack disasters seemed to be the norm, and TTAC’s Best & Brightest comments continue to bring that up whenever VW is discussed. The point that seems to be missed is that VW is addressing the issue, that industry surveys show this, and the newer vehicle lineup is in general getting better. Will they ever be up there with Toyota, Honda, or Mazda? Probably not. But the way some people would have you believe, there should be nothing but hundreds of dead VWs on the highway as you drive to work each morning.

            Huyndai’s quality reputation was miserable in the 90s, and they turned it around. VW’s quality reputation was miserable in the 00s, and it appears that they are turning it around as well. But with the industry in general getting better and better, the challenge of demonstrating that becomes even more difficult.

    • 0 avatar
      hreardon

      Great summary, Leek. If anyone has read Barbara Tuchman’s The Guns of August or GJ Meyers’ A World Undone, one of the key criticisms of the German War machine in 1914-1918 was its utter insistence to cling both to schedule and strategy far after it was clear to everyone that the pre-war plans were completely useless.

      I reference this anecdote not to brand all Germans as stereotypically rigid and blunt but as a cautionary tale for business in general. Most war plans are as good as the last war, as demonstrated by Vietnam and to a lesser extent the US policy toward Iraq and Afghanistan over the past ten years. The Japanese automakers have become masters of the OODA loop (http://en.wikipedia.org/wiki/OODA_loop) and learned to adapt and move quickly in response to changing market tastes and requirements. Volkswagen seems to lurch left and right from one overarching strategy to the next, especially when it comes to the US market (see: the push to become a competitor to Mercedes Benz in the early ’00s and compared to the volume play now…with the puzzling trial balloon of the Phaeton’s return in recent weeks).

      German officers in the field knew full well that the Schlieffen Plan wasn’t going to be worth the paper it was written on several weeks after the offensive bogged down, but the officers in Berlin refused to hear it and adjust their plans accordingly. A bloody stalemate resulted. I sincerely hope Volkswagen is in the process of throwing out the old battle plan and adjusting the tactics to achieve their goals in the US, but the ridiculous Phaeton trial balloon does not make me overly hopeful. That Winterkorn came to US dealers with little news about imminent new CUVs and competitive product to talk Phaeton is not a good sign.

      • 0 avatar
        Summicron

        Jeepers, the Schlieffen plan never failed; it was never implemented.

        What was implemented was the von Moltke modification of it after Schlieffen’s retirement. He weakened the right wing to bolster defenses against a likely French drive into the Alsace-Lorraine region.

        Schlieffen was wiling to risk some German territory there in exchange for an overwhelming sweep downward from Belgium by the right wing which could continue on to envelop the invading French from behind.

        Moltke hedged and compromised, belying the stereotypical rigid Prussian mindset and likely prolonging the war for years.

        • 0 avatar
          28-Cars-Later

          Correct. Incidentally, Von Schlieffen’s last words (in 1913 no less) were “keep the right wing strong” in reference to the plan.

          • 0 avatar
            Summicron

            William Manchester’s “The Arms of Krupp” gives a pretty enlightening glimpse into von Moltke’s personality as well as those of other 2nd-generation Generalstab members.

            There was a phrase prevalent in England and on the continent around that time: “The German Disease”.

            It didn’t mean measles.

          • 0 avatar
            28-Cars-Later

            Now I have a new book to read.

          • 0 avatar
            Summicron

            And I need to re-read ’cause I may be conflating that with Shirer’s Rise & Fall on the Prussians-in-ballerina-costumes (yes) vignette.

            But you can’t go wrong with anything Manchester. For the Pacific War devotee I recommend “Goodbye, Darkness”. It’s available for Kindle.

            Manchester was a Marine combat veteran of WWII.

          • 0 avatar
            hreardon

            Sorry for the lax writing there, all – I was going for more of the pop cultural reference than the detailed historical analysis.

            Good points, all.

  • avatar
    jz78817

    “Chryslerbishi?” Is it still 1995 or something?

    • 0 avatar
      jpolicke

      Go research the history of the 200/Avenger.

      • 0 avatar
        Luke42

        And the Caliber/Compass/Patriot triplets.

        In many senses, they’re platform engineering done right, but of you read reviews of all three, the common DNA starts to look like a problem.

        That said, a friend of mine owns a Caliber and it seems to be serving their needs just fine. But it’s still a Mitsubishi hatchback, no matter what logo is on the grill.

      • 0 avatar
        jz78817

        I have. In fact I was there for part of it. There is far, far less Mitsubishi in the JS/PM/MK than you seem to think. They were originally supposed to share the GS platform with Mitsu but after Mein Fuhrer Schrempp’s takeover bid for MMC was blocked by Daimler’s creditors, development was “reset” on the Chrysler Car Group products, and that waste of resources is one very big reason why they sucked so bad.

      • 0 avatar
        billfrombuckhead

        Rental and subprime champion Hyundai/Kia’s in there also with Mitsubishi and Chrysler in development of that “world engine” and that midsize platform.

  • avatar
    ihatetrees

    Subsidies are a rotten part of American Auto manufacturing. That said, at least the amount given here is publicly known. And there’s some effort, however lame, to get it back if the VW plant blows up.

    Some clarity regarding the ‘Works Council’ would be nice. Of course, US Labor Law makes evolved German-style cooperative labor agreements illegal in the US. There is a need for a middle ground between right to work and the union shop; but the partisans on both sides won’t give an inch.

    Regarding the (unattributed and non-linked) CEI quote comparing UAW organizing with the battle of Chickamauga…
    I agree that the (unattributed and non-linked) quote is over the top. But plumb the depths of UAW-land and the offensiveness (especially regarding Japanese transplants) is much stronger.

    • 0 avatar
      galloping_gael

      @ihatetrees
      http://cei.org/op-eds-articles/union-invasion-uaw-targets-tennessee
      apparently matt patterson of cei wrote that article and offered it up to the times free press.
      this took about 2 mins to figure out on google.

  • avatar
    galloping_gael

    CEI:
    http://en.wikipedia.org/wiki/Competitive_Enterprise_Institute#Funding

  • avatar
    jeff brown uaw3000

    Can anyone tell me if there is a “LETTER OF AGREEMENT“ written between VW & the UAW? This is very important information to know. Does the Aurthur of this article know about the LETTER OF AGREEMENT between the DANA CORP. and the UAW?? I have reason to believe VW and the UAW has this agreement already and NOT telling anyone about it. This letter will put a huge twist on the outcome over the UAW getting into VW!

  • avatar
    ravenchris

    And yet another example of career politicians swindling the public out of a better future by doing anything to receive the most campaign contributions.

  • avatar
    PenguinBoy

    Interesting analysis that I doubt would have been published under the previous management of this site.

    Thank you!

    • 0 avatar
      el scotto

      +1 Bertel’s VW bias was strong and apparent. Made many get tired of reading him; I mean how many times can you rewrite the “Americans are Stupid” by-line?

  • avatar
    28-Cars-Later

    I agree with the basic premise of the article, the local and TN state gov’t would have been wise to study the issues of the New Stanton plant instead of pushing more “corporate welfare”. However I would argue in the current economic climate, gov’t has no choice but to chase the carrot on the stick when the corporatocracy dangles it in any industry. In fact this tactic might be one of the few bits of direct leverage business has over dot gov, after all the local “elected” overlords have to occasionally produce results else they risk replacement by their constituents. Unfortunately in the US our leaders are happy to accept a deal which benefits them today regardless of how that deal could affect them five or ten years down the line. Shortsighted and/or politically motivated thinking is the ‘Merican way.

    • 0 avatar
      Nick_515

      I was going to comment based on your early sentences, but your logical thread led you to what I was going to say at the end of your paragraph. On top of the built-in political shortsightedness of our political system, someone above – Leek, i believe – made the easy point that Arkansas et al would be ready if it weren’t Tennessee, and we’d be amused by some other name’s quotes instead of Corker – same difference. Unfortunately, this means that Emerson’s analysis would not change anything. Tennessee could not have afforded to reach a more enlightened agreement because of the kind of state competition that global corporations like VW do not suffer from.

      TTAC is flourishing again.

      • 0 avatar
        28-Cars-Later

        I agree with Leek’s point and your points. State and local gov’t are in much more of a bind because they have to deal with the issues created at the federal level, have limited power and means to work around those issues, while still providing services citizens expect. I see no easy answers, but its important to remember a company VW’s size can afford to eventually close down the Chattanooga facility and take a loss if the American experiment doesn’t work out as they hoped one day. Can the folks in Tennessee afford to lose the economic activity? The Senator Corkers of the world should bear in mind, the devil is in the details.

    • 0 avatar

      Hey 28!

      “in the US our leaders are happy to accept a deal which benefits them today regardless of how that deal could affect them five or ten years down the line”

      And businesses are different exactly how? As evidenced by the article, Dell and their deal with a state, Big Business says a big f u when things don’t go their way 5 or 10 yrs down the line.

      I have actually been, many yrs ago, in a very ancillary function, on the State side, on one of these State vs. Major Auto Group negotiations. The demands they make are unbelievable. Guess it’s up to the State to just say no when demands are too outlandish (as my State did). But recklessness and perversity are prevalent on both sides. I’d even go so far as to say more on the business side as they know they dangle something enticing.

      Further rectification for this would be if more consumers “punished” businesses that act this way. In this instance the press would surely help, but insofar as I can see an independent press is something that simply doesn’t exist.

      Another way would be to build in penalties for corporations that don’t deliver. There is a Brazilian State that has gotten back, with a vengeance, the breaks they allotted to another auto maker when they were taken over by another group of Germans. I can tell you the Germans were quite taken aback when they were confronted and beaten down by a relatively small, internal Brazilian polity.

      • 0 avatar
        28-Cars-Later

        Marcelo,

        Business leaders should be held to a similar standard, but ultimately the role of business is to make money for its shareholders. I would hope businesses take into account a long term projection of their actions, but businesses do what they need to in order to profit else they run the risk of insolvency. While governments can technically go bankrupt, the past few years have shown gov’t will never be allowed to completely fail. They provide services business cannot and in theory they are supposed to provided a hedge against preventing business from looting the populace. In the case of Dell, I don’t know the story but it sounds like after they milked the local economy for tax breaks and other freebies, they packed up and left. Given this behavior, the people who live in and run the local governments need to be cognizant when they ink deals tied to tax breaks and other freebies. Someone in the relationship has to be held accountable.

        It’s nice to hear the Brazilian authorities can actually say “no” when a deal isn’t in their favor. You raise an interesting point on consumers boycotting firms who won’t conduct business practices conducive with their country/region, I don’t see US media or consumers taking to the idea. Tying results to tax breaks is also an interesting idea, the trick would be to use metrics which could not be manipulated by either side.

        • 0 avatar
          highdesertcat

          “ultimately the role of business is to make money for its shareholders”

          I think it is their one and all-encompassing only goal.

          The worker bees should get paid a fair day’s pay for an honest day’s work, to be sure.

          But when you get a union involved that’s not what you get. There’s a rich history of that in the American auto industry.

          However, there is no need to rehash the examples of the UAW in action with their Job Bank, and the other atrocities, like profit-crippling strikes, they perpetrated on their employers in the past.

          • 0 avatar
            28-Cars-Later

            Unions of any sort add a new dimension to the situation, but in the case of the article I believe the issue was between the local/state political elite as he puts it and VAG.

          • 0 avatar
            FreedMike

            I googled recent UAW strikes, and found two: a major one in 1998, and a two day strike in 2007 that resulted in the union having to take on health care costs for future retirees.

            These are the recent “atrocities.”

            We get that you hate unions.

          • 0 avatar
            highdesertcat

            There was a time when there was a dire need for unions. This was especially true at the turn of the 20th century when major industrial expansion took place in America. Workers were used and abused like so much cannon fodder back then.

            But today? With all the government imposed regulations and mandates? The OSHA safeguards? The EPA restrictions on chemicals and materials that workers can be exposed to? Asbestos, anyone?

            What can ANY union offer the VW employees that VW doesn’t already provide their employees, except another deduction in the form of union dues each pay day?

            Since my dad was a union man and hated his union for taking a 15% bite out of his pay check every pay day, I would like to know why workers feel they need a union to represent them with an employer, since everything is spelled out in the hiring contract a new worker has to sign at any reputable employer with an HR section. I’m certain VW has an HR section.

            Sweat shops exist in America even today, so why aren’t there any unions clamoring to organize those workers who need representation and protection?

            Why do unions want to organize the workers of large employers who already play by the rules?

            Specifically, hasn’t the UAW done enough damage already to the American auto industry by collectively bargaining a huge number of their members out of a job and their employers into bankruptcy? Job bank, anyone?

  • avatar
    Dave M.

    Bud Adams. To quote the Exorcist, your mother ***** ***** ** ****. I jest about your mom. As a Houstonian, BA’s name is still verboten here. We’re STILL paying the bond to upgrade the Dome to keep him back in ’88.

    Anyway, this was a fascinating article, and I greatly look forward to your book. I’ve always wanted to read a deep analysis of what went wrong in New Stanton….

  • avatar
    Manic

    Seems that author hates VW more than anything. Still, co. put $1B into that plant so show will go on there no matter what.
    http://en.wikipedia.org/wiki/Volkswagen_Chattanooga_Assembly_Plant#Cost_and_incentives

  • avatar

    Before getting upset about the $577 million in incentives, I’d think it would be important to explore the nature of the incentives themselves. As I understand it, ~$80 million was a land grant and the rest is tax breaks. Well, tax breaks aren’t really very detrimental to the state at all, because but for the plant, they never would have seen the tax revenue anyway. As for the land grant, I’m not sure anyone was going to use that 1,350 acres either. Thus, VW’s $1 billion investment in building a plant and operating it with 1,500 workers instead of 2,000 is still a huge win for the state.

  • avatar
    Hummer

    Hell if I ran a business I would do the same thing, when some idiot politician tries to lure businesses into a state with tax breaks or short time deals, the people that elected him/her should know what they have coming.

    The best way to get business in a state is to have the lowest taxes and Cheapest cost of doing business as the norm, which democrats refuse to accept, although I doubt They don’t realize such as fact.

    BTW, may want to do a little history checking before making a fool of yourself, the civil war was not fought over slaves, but rather unfair taxation, I find it hard to believe that is no longer taught in school. No need to be divisive.

  • avatar
    th009

    It’s rarely difficult to find data to support whatever conclusion you have decided is the correct one.

    As Mark Twain was famously quoted, there are lies, damned lies, and then there are statistics.


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