By on March 3, 2014

Volkswagen CrossBlue Concept SUV

Though United States Senator Bob Corker of Tennessee claimed Volkswagen would announce an expansion of the plant in his native Chattanooga — slated to build a midsize SUV based on the CrossBlue Concept from this year’s Detroit Auto Show — if the workers rejected the United Auto Workers in last month’s attempt to organise the plant, the German automaker has remained silent as of this weekend.

The Detroit Free Press reports Corker believes the delay is the result of an appeal made by the UAW to the National Labor Relations Board, citing the senator’s comments and those of outside anti-union interests as the chief causes in the election’s failure. He also dismissed the idea VW would decide to build the new SUV in either Tennessee or Mexico no matter the election’s outcome:

There is no way I’d put out a statement like I put out unless I was 1,000% that it was accurate in every way.

Meanwhile, VW is moving forward with a plan to install a works council in the Tennessee plant, though where the automaker may build its next U.S. plant depends on the success of the campaign. VW Global Works Council head Bernd Osterloh warned that the “massive antiunion atmosphere” surrounding Chattanooga could prompt the company to take their ball out of the South should future expansion be considered.

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49 Comments on “Volkswagen Mum On Alleged Expansion Of U.S. Plant...”


  • avatar
    xtoyota

    “VW Global Works Council head Bernd Osterloh warned that the “massive antiunion atmosphere” surrounding Chattanooga could prompt the company to take their ball out of the South should future expansion be considered.”

    Is this guy some kind of stupid ??????

    • 0 avatar
      Jeff Waingrow

      I don’t think he’s a bit stupid. The VW business model is to have a more collaborative relationship with the workforce than is the norm in the U.S. They want to institutionalize a mechanism to avoid clashes with labor. It apparently works well in Germany and elsewhere, and to VW, rabid anti-union sentiment is not an atmosphere they apparently appreciate. Is that really so bad? Politicians have exploited the current anti-unionion that is common in some states for their own benefit. But how quickly they would pivot if their bread were buttered otherwise.

    • 0 avatar
      heavy handle

      Not stupid. Why would you want to set-up a factory in a place where politicians take an activist role in what should be business decisions?

      That whole episode was a farce, and it’s pretty obvious that VW (and others) are regretting their choice of location for a factory. The fact that it’s right-wing government meddling doesn’t make any difference. The circus has come to town, and VW can’t make any business decisions that won’t be second-guessed on call-in shows and political blogs. It’s no way to run a business.

      • 0 avatar
        BigWill

        “Why would you want to set-up a factory in a place where politicians take an activist role in what should be business decisions?

        Probably because $577 million in incentives buys a lot of tolerance of that kind of thing.

        Further, now that VW and its Works Council have shown their support for getting a union of some sort into their plant, they should just stop shopping for expansion in the South and set up operations back in Pennsylvania or Michigan – because everyone in the non-Union South is on to them.

        • 0 avatar
          heavy handle

          Don’t be naive. Every jurisdiction offers incentives. Most of them probably offer a more stable place to run a business.

          I don’t think VW appreciates having some politician teaching them how to run a factory, and crying to the media at every opportunity.

          That’s crazy-ex-wife behavior, not pro-business behavior. Nobody wants to be in a situation where the first order of business every day is “what did that politician say this time, and how do we diffuse it?” There’s no way to come out of that mud fight clean.

          • 0 avatar
            BigWill

            Naive? Hardly. Naïveté is expressing sympathy for VW in the middle of all this.

            “Every jurisdiction offers incentives”

            Exactly, so why didn’t they pick a union jurisdiction? You know where VW’s third choice for the plant was? Michigan (Tennessee was first, obviously, and Alabama was second). So, VW could have set up its plant in the heart of the UAW and known they would have had an automatically unionized/work council’d plant. But NOOOOOO … VW pockets an extra $200+ million in incentives to put the plant in Bob Corker’s non-union Tennessee, and then finds out – SHOCK! Tennessee doesn’t want a union! Imagine that.

            VW in essence got paid $200+ million to not have a union (among other things), and after they cash the check they’ve realized 1) they don’t like the deal, and 2) that Bob Corker acts the same way now that he has his entire multi-decade political life.

          • 0 avatar
            heavy handle

            It seems like the “extra” $200 million (if that’s even a fact) is because TN doesn’t have big league auto experience. They had less to offer, so they needed to put more money in the pot.

            I don’t think VW really cares either way about the union. Obviously, all their other plants are union, and they are the most profitable car maker around, so there’s that. They were prepared to work with either result.
            What they do care about is being trapped in a mud-slinging politician’s re-election campaign. Nothing good can come of that.

            Overall, odds are that Corker has done more damage to business in TN than the UAW ever would. He may truly believe in his cause (as opposed to this being a cynical fundraising ploy), but right now he’s not helping the team.

          • 0 avatar
            Pch101

            “What they do care about is being trapped in a mud-slinging politician’s re-election campaign. Nothing good can come of that.”

            Exactly. Businesspeople like to get government help, but they don’t want government interference or to have their companies turned into political footballs.

          • 0 avatar
            BigWill

            “It seems like the “extra” $200 million (if that’s even a fact)”

            The “fact” is that Alabama’s 2nd place offer was $398M, $179M less than Tennessee’s; you can Google it yourself and do the math to figure out Michigan’s bid.

            “… because TN doesn’t have big league auto experience”

            Yeah, exactly, because Nissan – who has production capacity of 550,000/year in their Smyrna, TN plant, and recently moved their NA headquarters from CA to Nashville, TN – is in the leagues of what? Daihatsu? Maruti?

            “I don’t think VW really cares either way about the union.”

            Considering that IG Metall – VW’s German union – holds roughly half the seats on VW’s board, you *really* think that VW is ambivalent about union issues?

        • 0 avatar
          APaGttH

          …Don’t be naive. Every jurisdiction offers incentives. Most of them probably offer a more stable place to run a business…

          Exactly. People’s Exhibit A – Boeing 777 fiasco that just happened. Boeing played a lot of states to get the Washington union to cave – and the state of Washington is considering more incentives after the largest single tax incentive/break package in US history given by any state to a corporation.

          If VW said, we’re moving – you’d have 47 other states going, “me, me, me, me, pick me, we love you, pick me!!!”

          • 0 avatar

            > Exactly. People’s Exhibit A – Boeing 777 fiasco that just happened. Boeing played a lot of states to get the Washington union to cave

            All these “union this, union that” idiots believe their employers are as stupid as they are when it comes to self-interests. These real business guys know how to negotiate and play people off to get what they want.

            Dummies like to pretend they know what’s going on because they saw it on fox news or whatever but their pea-brains don’t stand a chance against those who write the programming.

      • 0 avatar
        Wheatridger

        What he said!

    • 0 avatar
      highdesertcat

      The VW top brass wanted a works council and union involvement in Tenn, no doubt brought on by the UAW begging the German union to help them get the UAW’s camel’s nose into the tent.

    • 0 avatar
      GeneralMalaise

      MICKEY KAUS ON VW’S PRO-UNION THREATS: “If management made that kind of threat to keep out a union, there’d be trouble with the feds. Can it be an ‘unfair labor practice’ for management to threaten retaliation if its workers don’t unionize?”

      Well, certainly not under this administration.

  • avatar
    CoreyDL

    That looks like an SUV FOR MEN.

    So they won’t make it.

    • 0 avatar
      dal20402

      If I could change just one thing about car enthusiasts it would be the pervasive gender insecurity.

      You don’t need square styling, a cartoonish chrome grill, and giant tires to be a man. Really.

      • 0 avatar
        CoreyDL

        You’ve extrapolated some things which were not present in the comment. The nature of the styling makes it look manly. That’s all I said.

      • 0 avatar
        Dr. Kenneth Noisewater

        No, you need MOAH POWAH.

        • 0 avatar
          brettc

          That could be easily accomplished with the 5.0L V10 TDI. More power than any soccer mom could ever need. And as an added benefit, it’ll chew through tires and brakes like there’s no tomorrow. :)

          • 0 avatar
            Kyree S. Williams

            That engine was available in the previous-gen Touareg, IIRC. But the fact that V10 Touaregs are some of the cheapest would indicate to me that there’s a problem with that engine…

    • 0 avatar
      Big Al from Oz

      @CoreyDL
      It looks very similar to the Amarok, but in a SUV form.

      I do think VW can make some nice looking vehicles.

      I would love to see the Amarok in the US with a V6 diesel 4 Motion, eight speed.

      http://www.themotorreport.com.au/content/image/v/o/volkswagen_amarok_canyon_concept_01_1-0306.jpg

      • 0 avatar
        CoreyDL

        I agree, when they aren’t watering it down for the US market. The Scirocco is great looking, and so is this concept. I found the Phaetons understated and purposeful. The original Touareg in the right colors was good too. And the mid 90s Jetta, in VR6 trim.

  • avatar
    Rod Panhard

    1. A politician runs his mouth about what he thinks he heard a corporation is going to do. Then the corporation doesn’t put it’s money where a politician’s mouth was. That’s not news.

    2. A union executive runs his mouth because a union did not win a battle. If the union executive did not run his mouth, he would appear weak to his union members. That is not news.

    3. A corporation has to look like they are playing ball with a dominant union and engages the union to be their friend. The union loses. The corporation still has to play nice with the dominant union, although they lost a battle.

    Honestly, why does the media think all these things have to be negotiated in public? The reaction is the blogosphere follows their lead and it shows up in places like TTAC and Kalopnij. Go figure.

    • 0 avatar
      Pch101

      You’ve misrepresented what happened. Corker didn’t merely claim to have “heard” it.
      __________

      U.S. Senator Bob Corker of Tennessee said on Wednesday (February 12) he has been “assured” that if workers at the Volkswagen AG plant in his hometown of Chattanooga reject United Auto Worker representation, the company will reward the plant with a new product to build…

      …”I’ve had conversations today and based on those am assured that 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,” said Corker, without saying with whom he had the conversations.

      http://www.reuters.com/article/2014/02/13/us-volkswagen-corker-idUSBREA1C04H20140213

      • 0 avatar
        Rod Panhard

        Like I said, a politician runs his mouth about what he thinks he heard. It was a completely unattributed story, other than Corker uncorking his mouth. Journalism Rule #1…when you can’t attribute a source, it’s not news. Corker’s “source” was not attributed. Therefore, it’s not news and he was just running his mouth.

        • 0 avatar
          Pch101

          Corker lied in an effort to sway the vote. It’s not that hard to figure out.

          “Journalism Rule #1…when you can’t attribute a source, it’s not news.”

          The source is Corker.

  • avatar
    dal20402

    So Bob Corker was just making stuff up in his zeal to appear as rabidly anti-union as possible. Not too surprising.

    • 0 avatar
      Trane_Engineer

      You obviously are ignorant of the auto industry in the south. VW is a small player and they either get on board or they can get out. In this case Corker is from Chattanooga and is concerned about his State. The UAW thugs need to stay out. For some reason dead beats like you stick up for the mafia UAW.

  • avatar
    Pch101

    February sales reports are out today. VW’s numbers are awful.

    The workers must be nervous. They need that expansion; the Passat may not be enough to carry them.

    • 0 avatar
      brettc

      Indeed they are. Once again Subaru outsold VW by about 7800 vehicles. VW claims it’s because of a model wind down but the only models winding down are the Golf and Jetta Sportwagen. Golf (and wagon, to a point) sales are always a blip in the U.S. so it’s sad to see them grasping at straws to explain their horrific sales. 6997 Passats sold in February! Not very good for Chattanooga.

      • 0 avatar
        highdesertcat

        In my area VW has a heavy ad campaign for leasing going on with the nearest VW dealer being >90 miles away.

        At one time there was a local VW dealer in my area but the VW products at that time just weren’t players. Anyone who owned a VW product at that time, me included, is not receptive to owning another one.

        This is one area where there could be a sales potential for VW with the younger people, but I haven’t seen many takers.

    • 0 avatar
      Carrera

      Of course the numbers are awful. The Passats are plagued by problems. True Delta shows is better than CR since they have fresh data. Not enough people are willing to be daring and jump from Toyota and Honda to VW. I know we beat this horse to death, but it is what is is and VW is VW. I’ve been on the TDi forum for the past two years or so since I was really considering the VW Passat TDi, and it isn’t pretty. Blown turbos seem to be fairly common. No one knows the cause. I am rooting for them, but it isn’t looking good frankly.

      • 0 avatar
        highdesertcat

        Anything turbo or supercharged has proven to be more trouble-prone. With VW they seem to break sooner, it seems.

        • 0 avatar
          Carrera

          It isn’t just the turbos either. Other small stuff as well. Blown rubber hoses, after 6000 miles? I don’t think VW ever had a good grip on their suppliers. Out of all the auto companies, their suppliers are probably the most spread all over the world ( just a WAG on my part, but it feels like that). I know the tdi engine comes from Poland in crates. Most of the parts come from all over Eastern Europe and are put together in Poland. I am sure the workers in TN are just are good or better than other US auto workers, but if they are given crap to work with, it isn’t going to come out a diamond right? Toyota did a little but of this of course, but when they screw up, they apologize and recall. All that VW does is call American customers “stupid” if you are to read between the lines.

          • 0 avatar
            Charliej

            I don’t know why, but German vehicles seem to have a lot of problems with ruber and plastic parts. I had a 2006 Sprinter van. I loved it, but the rubber parts started failing in the third year of ownership. Belts and hoses, the rubber in the harmonic balancer, the plastic turbo resonator all failed. The plastic turbo resonator failed repeatedly. The engine appeared to be bulletproof, but the rubber and plastic parts were a genuine pain in the ass.

          • 0 avatar
            highdesertcat

            Yep, been there, done that with VW.

            Bought a brand new 1982 VW Quantum for my wife to commute to University with upon our return from Germany, based largely on our excellent experience with a German-built Passat her uncle in Heidelberg had lent us for four months after we shipped our Yank tank back to the states.

            We loved the Quantum, for about six months. And then it was one thing after another, like external and internal trim pieces falling off, the check-engine light coming on along with a foul smell of rotten eggs, and on and on and on.

            Worst thing was the intermittent AC and various vacuum leaks that kept the AC air valve from opening behind the instrument panel.

            Oh, and the radio! A blaupunkt! VW replaced it twice under warranty before we took a loss and got rid of that POS. My wife needed something dependable to drive to school with.

            Indeed, it would be a cold day in hell before I buy another VW product. The German built ones were pretty damn good from what I know.

            But what passes for VW quality outside of Germany are like malformed wet dingleberries.

    • 0 avatar
      natrat

      can you say westmoreland redux ?

  • avatar
    geeber

    I’m guessing that VW wants the UAW election story to die down before making an announcement. It would probably prefer that these two stories not be linked. That may be impossible, but making an announcement so soon after the election virtually guarantees that they will be intertwined.

    • 0 avatar
      Pch101

      It wouldn’t be surprising if the falling numbers may be prompting some soul searching about their US operations. Year-over-year Passat sales are down 19% (although a lot of the competition is getting clobbered, too.)

      • 0 avatar
        geeber

        VW needed an inexpensive crossover yesterday. Anecdotal evidence is always shaky, but I’m amazed at how many of our friends and relatives are either driving something in this class, or pondering which one they will buy.

  • avatar
    Charlie84

    We would welcome a VW plant in Minnesota, union or no union.

    http://www.minnpost.com/political-agenda/2014/02/minnesota-officials-volkswagen-after-tennessee-trouble-come-iron-range

  • avatar
    Big Al from Oz

    The German auto workers must have realised that dealing with the UAW spelt trouble.

    Now the German auto workers are trying to influence an outcome.

    If VW moves out of the US, would they stay or go to Mexico?

  • avatar
    wmba

    The VW plant in Puebla is immense. Brendan McAleer visited it and wrote this:

    http://driving.ca/volkswagen/auto-news/news/volkswagen-is-hometown-hero-in-huge-mexican-city/

    Don’t believe it is unionized.

    • 0 avatar
      gogogodzilla

      It has a works council.

      The only places that do not have worker representation for VW is in their Chinese factories… and in the US.

    • 0 avatar
      Pch101

      Puebla is unionized. They also like to threaten strikes every so often. To my knowledge, this is the most recent:

      http://www.bloomberg.com/news/2011-08-17/volkswagen-mexico-union-wants-7-5-wage-hike-to-avoid-strike-1-.html

  • avatar
    mvlbr

    TBH VW should just close up shop and move the production back to Mexico where labor is cheap and the locals actually like VW cars unlike here where no matter what they do they will not increase their market share since people here tend to favor reliable appliances and not complex and unreliable German machines.


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