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.