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Republicans Angry Volkswagen Isn't Sufficiently Anti-Union

NEW YORK ( TheStreet) -- The union vote scheduled for Wednesday at Volkswagen's giant auto plant in Chattanooga, Tenn., is turning the usual scenario of labor vs. management on its head.

Typically, United Auto Worker campaigns in the South ride headfirst into a concerted effort by automakers to oppose any and all unionization. Corporate opposition generally combines with firm pronouncements by local politicians and chambers of commerce officials to defeat calls for a union.

That's what happened at Nissan's plant in Smyrna, Tenn. in 1989 and again in 2001 as well as its factory in Canton, Miss., in 2005 and 2007. In the 35 years since foreign-owned automakers began building factories in the South, the companies, combined with local political and business leaders, have helped to defeat UAW organizing drives.

But the vote Wednesday at VW's plant in Chattanooga is proving to be quite different.

Executives at Volkswagen, the world's third-largest automaker behind Toyota (TM - Get Report) and GM (GM - Get Report), have conspicuously refrained from the usual chorus of anti-union diatribes, Detroit putdowns and recollections of the bad old days when the Big Three did make lousy cars, and labor relations -- a two-sided dysfunction -- were nothing short of terrible.

Bernd Osterloh, Volkswagen's works council chief, said last month in Wolfsburg, Germany, that he would like to see Chattanooga's workers accept a German-style works council which represents both assembly line workers and management.

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Osterloh called the day-to-day management of the Chattanooga facility a "disaster," a few weeks after its U.S. divisional chief Jonathan Browning was replaced by Michael Horn after sales of its midsize Passat declined 6.3% last year.

Likewise, Volkswagen CEO Martin Winterkorn has made it clear that he doesn't necessarily oppose unionization at the Tennessee plant given that the Chattanooga plant is VW's only facility worldwide not to have a works council. Under U.S. law, a works council cannot be established unless its roughly 1,500 workers vote to be represented by a labor union.

Filling the anti-union void, Sen. Bob Corker (R, Tenn.) and other state Republicans have repeatedly criticized Volkswagen executives for not being sufficiently wary of the UAW.

Earlier this week, Tennessee state Sen. Bo Watson, the second-highest ranking Republican in the upper chamber, warned Volkswagen that state officials would seek to withhold tax incentives for future expansion of the three-year-old assembly plant in Chattanooga if workers choose to join the UAW.

"For management to invite the UAW in is almost beyond belief," Corker said in September. "They will become the object of many business school studies -- and I'm a little worried could become a laughingstock in many ways -- if they inflict this wound."

More recently, Corker warned that a UAW presence in Chattanooga would be bad for the entire region's economy. "I'm not trying to influence what the employees do," the senator added.

Corker's comments follow a public campaign by Grover Norquist's anti-tax group in Chattanooga to influence the vote through commercials and billboards. Republicans have also warned workers that joining the union might convince VW executives to locate a giant new plant earmarked for North America in Mexico rather than the U.S.

"There's an irony that someone like Senator Corker who speaks so extensively about letting the private sector do its job is, as a government official, seeking to dictate to the private sector how they should organize their production," said Harley Shaiken, a professor of labor relations at the University of California at Berkeley, said in a phone interview. "Last I checked, Senator Corker didn't run a global company the size of Volkswagen and as successful as Volkswagen."

Corker is holding a press conference Tuesday in Chattanooga to further explain his opposition to worker's aligning with the UAW.

-- Written by Leon Lazaroff

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