published Tuesday, January 31st, 2012

Volkswagen, Indiana, unions and the right to work

  • photo
    Volkswagen workers build Passats at the Chattanooga manufacturing plant.
    Photo by John Rawlston.
    enlarge photo

It is a painful fact that costly, unrealistic collective-bargaining agreements were part of the cause of severe financial troubles at major U.S. automakers in recent years. Ultimately, some automakers needed huge, taxpayer-funded bailouts as a result.

So it was noteworthy recently when Indiana Gov. Mitch Daniels mentioned Tennessee's ability to attract the big Volkswagen manufacturing plant now in Chattanooga as a reason why he supports a right-to-work law for Indiana.

Tennessee, unlike Indiana, is a right-to-work state, meaning that unions here cannot collect mandatory dues.

Daniels apparently feels that Indiana's lack of such a law is at least part of the reason why Volkswagen didn't give serious consideration to Indiana when it was deciding where to locate its new plant.

"I couldn't get VW to return our call," he said on an Indiana TV show.

If a proposed right-to-work law passes in Indiana, it would be the first in the Great Lakes states, Forbes magazine noted, and Indiana would be the 23rd state overall to have such a law.

Volkswagen declined to comment on the article in Forbes, and of course it is impossible to know exactly how big a factor Tennessee's right-to-work law might have been in bringing VW to Chattanooga. Certainly no one argues that it was the only consideration. But labor costs are obviously something that auto companies must think about when deciding where to build an expensive plant.

At any rate, we are pleased that VW saw in Chattanooga and the surrounding region the right combination of factors, from low costs and taxes to the caliber of our workforce to the area's friendliness and natural beauty.

We are reaping the resulting rewards of economic development and job creation.

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conservative said...

Hmm, shall we build our plant in Indiana where the REGULATION of higher labor cost will lessen our profit and increase the cost of making our product thus making us less competitive, or shall we build in the great state of Tennessee where we can reduce our cost and increase our profits benefiting both us and residents of Tennessee and Georgia who will have a job?

I believe even a Lieberal could answer that question.

January 31, 2012 at 11:02 a.m.
timbo said...

Conservative....Mitch Daniel is too smart to make the worst deal in history. $587 million in cash and incentives was an all time world record by 2 times. What we go out of it was about 700 local jobs and a tax increase. The closest competitor was Alabama at about $380 million. I can here the Germans laughing all the way across the Atlantic. They think we are just a bunch of rubes.

Have you even read the "Memorandum of Agreement" between the state, county, and city with VW. The things we gave them are almost comical. A $8 million dollar walking bridge...come on.. Look it up on the internet. Also, this fantasy that it will create gazillions of jobs is just a lie. The Bureau of Labor statistics web site shows that it is not true.

How dare you or Anderson call yourself a conservative. People like you are the problem in the Republican party.

It is not conservative to use government money to prop up a private company. It is not conservative for the government to pick the winners and losers. You all are all a bunch of hypocrites because you critisize Obama about "saving" GM, the bank bailouts, and things like Solyndra. There is no difference than financing VW on the backs fo the local and state taxpayers. VW can fend for themselves because they are the 3rd Largest car company in the world. It is not conservative to waste tax payer money. Grow up!!

I don't think any of this is conservative because I walk the walk not just talk the talk. ALL OF THESE DEALS ARE JUST LOCAL SOCIALISM.

Daniels was only using the VW thing to prop up his argument about the unions. His point is correct but the example he used sucks. You sounds like another Romney voter to me.

January 31, 2012 at 2:33 p.m.
shoe_chucker said...

the editor is a liar. labor was 10% of GM's budget before the bailout. they spent the majority on R and D and sweet deals for executives.

January 31, 2012 at 3:30 p.m.
conservative said...

Mitch Daniels doesn't have the VW plant in his state.

The great state of Tennesee does, Tennesseans have jobs instead of food stamps and unemployment.

Chill out!

January 31, 2012 at 4:44 p.m.

There's no shortage of people on food stamps and seeking jobs in Tennessee.

Guess we should sell out to more corporations. I heard FoxConn can supply 10,000 workers at any time, and only has to feed them a biscuit and a cup of tea. Until we can provide the same, we'll fall behind!

January 31, 2012 at 7:12 p.m.
MasterChefLen said...

Unions = Mafia. Jimmy Hoffa is a perfect example.

January 31, 2012 at 10:45 p.m.

You think organized crime isn't to be found in corporate boardrooms?

January 31, 2012 at 11:57 p.m.
eurekbennison said...

Hmm. Definitely its a right decision for the government of Indiana. Besides, Volkswagen as one of the reputable auto makers in the world would generate high volume of jobs to the said place. It's a fact that global market is struggling these days and we should cooperate with each other in order to end up with the remedy. Volkswagen has been doing good this year though. With the presence of newer car brands such as the Passat. On top of it, the auto maker is now dealing with VW parts which are truly made to help people in terms of car troubles. For the up coming years to come, idiana would actually came up with the appreciation for giving VW a chance to show what they've got.

March 5, 2012 at 4:58 a.m.
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