U.S. executives at Volkswagen AG's plant in Tennessee were "forced" by a German board member to sign a letter disclosing the United Auto Workers' efforts to organize the factory, a move that created distress within the company, U.S. Senator Bob Corker said on Tuesday.
VW executives said last week in a letter to employees at the Chattanooga plant they were in talks with the UAW about the U.S. union's bid to represent workers at the factory using an "innovative model," which would be a milestone in the union's long-running effort to organize foreign-owned auto plants.
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Corker said the letter, signed by Frank Fischer, chief operating officer and manager of the plant, and Sebastian Patta, the plant's human resources manager, was driven by the board member in Germany and not by the U.S. executives.
VW's German board includes IG Metall union members who would like to see the UAW organize the Chattanooga plant and bring it in line with Volkswagen's other major factories around the world which all have union representation.
"There was a lot of dissension within the company," the Republican senator said in a telephone interview with Reuters. "I don't think it, I know it. Candidly, one board member got very involved and forced this letter to go out.
"I know that it's created tremendous amounts of tension within the company," said Corker. "Many people thought that this was a dishonest letter." While it implied that U.S. executives and others at Volkswagen in Germany fully endorsed the UAW, he added, disagreement within the largest German automaker may put that support in doubt.
A Volkswagen spokesman at the Chattanooga plant, Guenther Scherelis, on Tuesday night disputed Corker's claims.
"The letter to the Chattanooga workforce was drafted, written and signed by Frank Fischer and Sebastian Patta to avoid further speculation from outside the company, without being forced by anyone," Scherelis told Reuters.
The UAW has been working with German union IG Metall, which represents VW's workers in Germany.
Corker did not identify the board member, although Horst Neumann, who is also a member of IG Metall, said in March that the company was in talks with the UAW about setting up a German-style labor board in Chattanooga, where VW builds the Passat sedan.
Neumann is head of human resources for Volkswagen, based in Wolfsburg, Germany.
A former mayor of Chattanooga, Corker said if VW didn't pull back from allowing the UAW into the Tennessee plant, it risks becoming a "laughingstock in the business world" and causing a domino effect with other nonunion auto plants in the South.
However, the production chief for Mercedes said at the Frankfurt auto show on Tuesday that the German company had no need for a German-style works council at its plant near Tuscaloosa, Alabama.
Corker, who was instrumental in VW's selection of Chattanooga, called the UAW's possible entry into the plant "a job-destroying idea" and said the UAW's suggestion that it was more flexible and easier-to-work-with was laughable.
"I've got to believe that the CEOs of the three U.S. companies are just rubbing their hands, hoping Volkswagen will carry out this self-inflicted wound," he added, referring to General Motors Co, Ford Motor Co and Fiat's Chrysler Group, all of which have unionized workforces in their U.S. plants.
Gary Casteel, the UAW's regional director in the Southeast who is based in Tennessee, said Corker's views on how the UAW operates today is "spoken from a position of ignorance." He said VW had become one of the world's strongest automakers through its policy of co-determination, where labor has a voice at all its wholly owned plants except Chattanooga. Volkswagen has about 100 plants worldwide.
"It's ludicrous to think that Chattanooga benefits from being the only outlier in this system," Casteel said in a telephone interview.
Casteel added the UAW was ready at any time to sit down and discuss the issues with Corker or Tennessee Governor Bill Haslam, another opponent of the UAW.
Casteel said the German-style works council approach has never been tried in the United States.
VW has said that the 2,500 workers at the Chattanooga plant would ultimately decide the issue in a formal vote on whether to accept the UAW or any other trade union to represent them. No such vote has been set. Casteel said the UAW has the support of the majority of workers at the factory.
UAW President Bob King has been trying to organize foreign-owned, U.S.-based auto plants to bolster union membership that has shrunk since its peak in the late 1970s.
King met in late August with VW executives and officials from the company's global works council, which represents VW blue- and white-collar employees around the world. The union said that meeting "focused on the appropriate paths, consistent with American law, for arriving at both Volkswagen recognition of UAW representation at its Chattanooga facility and establishment of a German-style works council."
Corker said VW officials have estimated what allowing the UAW into the Tennessee plant would cost the company but declined to say what that figure was. Corker said recruiting companies to Tennessee would be more difficult if the union were to represent workers in Chattanooga. He also said it would make Mexico more attractive to automakers versus the U.S. South.
Casteel said U.S. plants owned by the three domestic automakers with UAW-represented workers have boosted efficiency and gained production from Mexico.
(Editing by Andrew Hay and Prudence Crowther)