As legislators eye VW subsidies, Ramsey says Saturn subsidies may have been a mistake

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — State Senate Speaker Ron Ramsey said Thursday that it may have been “a mistake” for Tennessee to subsidize the development of the General Motors plant outside Nashville because it has a United Auto Workers union contract.

The Blountville Republican’s comments came as GOP lawmakers weighing a $166 million incentive package for Volkswagen expansion in Chattanooga seek assurances that the German automaker will remain neutral on labor issues among its workers.

Republican lawmakers have grumbled about the United Auto Workers union’s ongoing role at the plant, and Ramsey pointed to the thriving Nissan plant in Smyrna as an example of the benefits of nonunion auto production compared with the GM plant that begun its life making Saturns.

“Maybe we made a mistake years ago with the things we did for Saturn, because it’s been up and down, closed and open, and yet Nissan is booming right now,” Ramsey said.

The GM plant in Spring Hill produced more than 3.7 million vehicles between 1990 and 2007. At its peak, the facility employed nearly 8,000 workers. But that number had dwindled to about 630 by 2009, when auto assembly was idled during the Great Recession.

Production was restarted following a 2011 contract agreement with the UAW that included salary concessions for entry-level workers and an agreement to bring jobs to Spring Hill that would have otherwise gone to Mexico. The plant now employs about 1,700 hourly workers. GM announced earlier this month that under the 2011 contract, each worker will receive $9,000 in profit sharing.

The Nissan plant in Smyrna has added about 4,500 jobs since 2011, bringing its total to 8,400 employees. The plant made 648,000 vehicles last year.

Mike Herron, the chairman of UAW Local 1853 in Spring Hill, said organized labor has played “a critical role” in developing the auto industry in Tennessee. The UAW estimates that all but 2,000 positions at Nissan are filled by temporary employees, while all of the blue-collar jobs at GM have permanent status and benefits.

“These jobs give people the opportunity to be part of the middle class,” Herron said. “If you really take a look at some of the stuff happening at Nissan, do we really want — in the state of Tennessee — that to be held up as our pinnacle of success?”

Nissan declines to divulge how many of its workers are permanent employees.

The UAW narrowly lost a unionization vote at the Volkswagen plant in Chattanooga last year, but the union has since qualified for a new labor policy at the plant that grants access to meeting space and to regular discussions with management. The policy stops short of collective bargaining rights.

The union is also trying to organize Nissan’s plants in Smyrna and Canton, Mississippi, and Daimler AG’s Mercedes-Benz plant in Tuscaloosa, Alabama.

Ramsey’s comments follow a recent statement by Kentucky Gov. Steve Beshear that he sees his state’s neutrality on labor matters as “a positive sales point” for potential automotive investors, especially in contrast to the turmoil over the UAW in Tennessee.

“I’m not trying to tell Tennessee or any other state how to handle their economic development efforts,” Beshear said. “I can just say that in Kentucky we would welcome either type of situation, either companies with unions or without them.”

Like Tennessee, Kentucky has both UAW-represented factories and nonunion plants.

Tennessee Gov. Bill Haslam agrees that the state is better served promoting nonunion jobs, spokesman David Smith said in an email Thursday.

“We have a responsibility to look out for Tennessee taxpayers, and over the years results out of our non-unionized sites have been better,” he said.