Tag Archives: volkswagen

Legislators to talk clawbacks at Volkswagen hearing

State lawmakers plan to discuss the idea of clawbacks From Volkswagen at a special Senate committee hearing Oct. 29 in Chattanooga, reports The Tennessean.

“Metrics and ‘clawback’ provisions will be a part of the discussion, and it is too early to determine what, if any, metrics VW may have attained,” (Senate Speaker Pro Tempore Bo) Watson said in a prepared statement to The Tennessean.

“The purpose of the hearing is to allow for a transparent conversation between the Senate, ECD, and VW about how VW moves forward in Tennessee and insure the public that the Senate takes its fiduciary responsibility seriously, which means we will review the components of our most recent incentives and VW’s performance relative to the incentives.”

The German automaker faces billions of dollars in fines after a U.S. investigation revealed at least 11 million cars were installed with software that allowed them to cheat on emissions testing. The incoming chairman for VW recently said the scandal is “an existence-threatening crisis for the company,” according to USA TODAY and other reports..

…Tennessee Department of Economic and Community Development Commissioner Randy Boyd (mentioned) the idea of clawbacks — requiring a company to return state money if the company doesn’t meet previously agreed upon benchmarks — in a letter he sent in late September to the General Assembly. But that letter merely outlines the clawback provision in the latest $165 million capital grant provided to VW.

“Any discussion of clawbacks is hypothetical. We have assurances directly from company executives that Volkswagen’s expansion remains on track,” said Clint Brewer, a spokesman for the department.

News release below
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TN politicians fretting about VW troubles

Excerpts from a Times-Free Press story:

House Majority Leader Gerald McCormick, R-Chattanooga, said VW needs to get to the bottom of the scandal.

“You know they’re talking about fines. I think they need to be talking about people going to jail if they did this,” McCormick said. “It’s a huge fraud by a huge company that has plenty of attorneys to vet this kind of thing. There’s no excuse for it.”

McCormick said plant workers have asked him, “‘Do you think this is going to affect us? Or are they going to close the plant, that kind of thing. I can’t imagine they would close the plant after making that big investment. It wouldn’t shock me if they didn’t slow down their expansion plans though.'”

Meanwhile, Haslam said he has two concerns.

“No. 1, we have an investment in the original plant and then the expansion. Second, we obviously have a vested interest in their success; I mean, in them selling cars. And so we’re urging them to get everything out in front of everybody as quickly as possible so existing customers can understand what the solution is going to be and [so] that Volkswagen can have a clear path forward.”

Tennessee government provided an estimated $358.2 million of the original $577.4 million in incentives that drew Volkswagen to build its Passat in Chattanooga. Local governments provided the remaining $219.2 million.

And this year Tennessee, Chattanooga and Hamilton County governments committed to more than $260 million in incentives for a new line of SUV production.

“Obviously there’s a lot of questions out there in the consumers’ mind. I think that’s why it’s really important for Volkswagen to come out quickly and say, ‘Here’s what we’re going to [do to] address our existing customers and here’s why we can assure potential customers that they’re going to get the vehicle they think they’re buying,'” Haslam said.

Watson said there are worries of a domino effect on jobs related to the plant and its suppliers.

“That’s all of our concerns,” the Senate speaker pro tempore said.

Haslam, other politicos: VW troubles shouldn’t hurt TN

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — As an emissions cheating scandal engulfs the German automaker Volkswagen, Tennessee officials are trying to soothe fears about the potential impact on the company’s Chattanooga factory, the crown jewel of the state’s economic development efforts of the last decade.

Republican Gov. Bill Haslam said Thursday he’s been assured by officials at the Tennessee plant and Volkswagen’s Wolfsburg, Germany, headquarters that “nothing has changed” for their Tennessee operations.

“Obviously we’re concerned about the impact, but their reassurance is this is not going to change their business plan in Chattanooga,” he said.

Chattanooga was selected in 2008 as the site of Volkswagen’s first U.S. plant in decades. It was part of a strategy endorsed by then-CEO Martin Winterkorn to boost North American sales. Winterkorn resigned Wednesday, days after admitting that the world’s top-selling carmaker had rigged diesel emissions to pass U.S. tests during his tenure.
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VW troubles escalate; TN legislature to investigate

As Volkswagen’s troubles escalated internationally on Tuesday, state Sen. Bo Watson called for a legislative committee hearing “at the earliest possible date” to consider possible impact within Tennessee, where lawmakers honored Gov. Bill Haslam’s request for $165 million in incentive payments to Volkswagen earlier this year.

“While all of the relevant facts may remain unreported at this time, I am very concerned as to the financial impact these violatons could present to the State of Tennessee,” Watson wrote Senate Finance Committee Chairman Randy McNally in a letter distributed to media Tuesday.

“It therefore seems prudent and responsible that the Finance, Ways and Means Committee of the Tennessee Senate consider a public meeting to hear testimony from Volkswagen and state officials as to the impact upon Tennessee’s investment in Volkswagen,” Watson said.

McNally said later, according to a Senate Republican Caucus spokeswoman, that he “will schedule a hearing as soon as we coordinate with committee members and the other parties involved.”

Watson, R-Hixson, represents a portion of Hamilton County, where Volkswagen has built a major facility and received huge payments for doing so from the state.

Here’s an AP story on Volkswagen’s troubles, filed about the same time Watson’s letter was sent:

BERLIN (AP) — Volkswagen AG’s smog-test scandal escalated Tuesday as the company issued a profit warning, set aside billions to cover the fallout and lost billions more in market value. VW’s CEO said he is “endlessly sorry” that the world’s top-selling carmaker has squandered worldwide trust in its brand.

The rapid-fire developments came as Volkwagen stunningly admitted that some 11 million of the German carmaker’s diesel vehicles worldwide contain software that evades emissions controls, not just the half a million cars that the U.S. Environmental Protection Agency said violate the Clean Air Act.

Volkswagen also warned that future profits could be affected, and set aside an initial 6.5 billion euros ($7.3 billion) to cover the fallout.
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Haslam concerned about VW cheating on emissions

Revelations that Volkswagen, a leading employer in Tennessee, may have intentionally cheated on carbon emissions testing for hundreds of thousands of vehicles is concerning to Gov. Bill Haslam, reports The Tennessean.

“Obviously we’re concerned about that,” Haslam said when asked about the allegations Monday.

The Environmental Protection Agency accuses the German automaker of installing a device in 482,000 vehicles that makes it appear as though the vehicles meet emission standards when tested. The actual emissions levels change when the vehicle is not being tested, as reported by USA TODAY and other media outlets.

EPA head Gina McCarthy called Haslam late last week to give him a heads-up about the announcement, Haslam said. Someone from Volkswagen called him as well before the news broke last week.

“Volkswagen is somebody that is a major partner for us in the state of Tennessee, both in terms of investment and the jobs created. We’re obviously very interested in their continued growth, but they’re going to have to address this issue,” Haslam said.

The car company faces $18 billion in federal fines.

Lt. Gov. Ron Ramsey, the Senate speaker, told the Times Free Press that the revelations are “Depressing, hard to believe. On and on. We’ve made a huge investment.”

The state’s latest incentives, some $168 million to assist VW’s planned addition of SUV production in Chattanooga, were approved by the State Building Commission just earlier this month.

UT report says Volkswagen expansion could create 9,800 new jobs

CHATTANOOGA, Tenn. (AP) — A new study projects Volkswagen’s expansion in Chattanooga could lead to the creation of nearly 10,000 jobs.

The report conducted by the University of Tennessee’s Center for Business and Economic Research was released Wednesday and estimates the factory could add $370 million in new annual income once the expanded production is underway.

The report was commissioned by Volkswagen, which is spending $704 million to grow the plant to make a new sports utility vehicle and to open its new North American Engineering and Planning Center.

The projected 9,800 new jobs include 1,800 positions at the plant and 200 jobs at the engineering center.

“Extensive supplier linkages and good incomes earned by Volkswagen employees account for the significant employment gains and economic multiplier effects in Tennessee,” said Bill Fox, the director of the UT center and author of the report.

The plant expansion is scheduled to be completed by the summer of 2016.

“The study underscores Volkswagen’s commitment to Tennessee, and we are excited to grow our team and the Chattanooga plant as we gear up for the production of our first-ever seven-passenger SUV for the U.S. market,” Christian Koch, the president and CEO of Volkswagen Chattanooga, said in a release.

The Chattanooga facility is Volkswagen’s lone U.S. assembly plant.

Republican Gov. Bill Haslam last week signed into law the state’s $33.8 billion spending plan that included about $166 million in state incentives for the VW plant expansion.

UAW signs up 55 percent of Volkswagen work force in Chattanooga

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — The United Auto Workers union has 816 members at the Volkswagen plant in Tennessee, or about 55 percent of the total blue collar work force, according the union’s latest disclosure with the U.S. Department of Labor.

The filing comes as the UAW works toward gaining collective bargaining rights at its first foreign-owned plant in the South. And the union’s case for recognition could be bolstered by leadership shakeup at the German automaker that has left a former union chief, Berthold Huber, as the interim chairman of the world’s No. 2 automaker.

The UAW last year narrowly lost a union vote at the Chattanooga plant that featured heavy campaigning by anti-union Republicans like U.S. Sen. Bob Corker. Huber wrote workers at the plant before the vote urging them to support the UAW.

“I recommend that you choose to have a democratic voice in your work place and vote for union representation by the UAW,” Huber wrote in December 2013. “Thus you will become a part of a global family of solidarity.”

Huber took over the helm of Volkswagen last week after the shock resignation patriarch Ferdinand Piech, who had shaped the company’s destiny for more than 25 years. Piech had criticized CEO Martin Winterkorn in an interview with Germany’s Der Spiegel magazine, saying he was “at a distance” from him. Other board members — including labor representatives who make up half of the 20-member supervisory board — backed Winterkorn.

One of the sticking points between Piech and Winterkorn was said to be Volkswagen’s underperformance in the U.S. market, where the company saw market share drop from 3 percent in 2012 to 2.2 percent in 2014.

Volkswagen last year announced plans to expand the Chattanooga plant to build a new SUV aimed at reviving flagging sales in the U.S., but the new model isn’t expected to hit dealerships until next year.

The decision to build the new SUV followed months of political tension stemming from Volkswagen’s labor-friendly corporate culture coming into the political crosshairs of Republicans who fear a UAW foothold among foreign automakers would make the region less competitive to future investment.
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Watson berates VW officials as ‘a magnet for organized labor’

Senate Speaker Pro Tempore Bo Watson, whose district includes the Volkswagen plant at Chattanooga, declared during a legislative hearing Tuesday that the German auto manufacturer has intentionally become “a magnet for organized labor,” reports the Chattanooga TFP.

Watson, R-Hixson, repeatedly drilled David Geanacopoulos, Volkswagen America’s general counsel, about its labor policies.

Watson said the incentives for Volkswagen “will give Southeast Tennessee a big foothold in the automotive industry particularly in research and development and … development of a new line of VW vehicles” — a planned SUV.

“However, Mr. Chairman and committee members,” Watson said, “VW is a magnet for organized labor, intentionally.”

…Watson specifically zeroed in on news accounts of comments made last year at a national UAW convention by Frank Patta, vice chairman of VW’s European and Global Group Works Council, which represents workers worldwide.

The lawmaker read from news accounts in which Patta said VW’s works council is a model that can only help workers.

“We did not lose the fight. I promise you we will go on,” Watson read from Patta’s comments. “Our dream is stronger than the resistance of our enemies. We will only rest once our colleagues in Tennessee have the UAW and co-determination. Our works council model will spread to the entire South and hopefully far beyond Tennessee. … This is our dream.”

…Geanocoupolis said “we believe it is a question for our employees to decide. We have actually established a new policy in the company that allows us to have conversations with any labor organization that has support from our workforce. Not about collective bargaining. It’s not about union representation.”

He noted that under VW’s community engagement policy, the company also granted limited recognition to an anti-UAW group calling itself the American Council of Employees (ACE). Both the UAW and ACE meet with company officials to “exchange ideas,” Geanocoupolis said. “And that’s the extent of it. We have this obligation to be engaged with our employees and the groups that represent them and it’s embodied in this new policy which is open and transparent.”

Replied Watson: “I’m not sure that really answers the question of whether there’s a partnership or not.”

In the end, the Commerce Committee approved the incentive grant as part of the Economic and Community Development Department’s budget without Watson’s support.

The vote was 8-0 with Watson abstaining.

Anti-UAW group moves to set up alternative union at Chattanooga VW plant

A group of employees at Volkswagen’s Chattanooga plant is developing plans to set up an alternative to the United Auto Workers Union, reports the Chattanooga TFP.

“It’s totally legal,” said VW employee Mike Burton, an anti-UAW leader at the plant. He said the group hopes to gather enough signatures to have an election for the American Council of Employees.

It would counter UAW Local 42, which the Detroit-based union set up in June with hopes of gaining enough members that VW will recognize it.

The ACE website said its group is in a hurry because it believes VW will announce as early as today that it will give office space to Local 42 in the plant.

Scott Wilson, a VW spokesman, had no comment.

Gary Casteel, the UAW’s secretary-treasurer, discounted the independent unionizing attempt, adding that it would differ greatly from Local 42.

“What does an anti-union union offer?” he asked.

Casteel has said that the UAW already has arrived at a consensus with VW.

“Upon Local 42 signing up a meaningful portion of Volkswagen’s Chattanooga work force, we’re confident the company will recognize Local 42 by dealing with it as a members’ union that represents those employees who join the local,” he said.

Corker says pro-union vote would have killed VW expansion

While the United Auto Workers says its Chattanooga local has signed up more than 670 Volkswagen workers, U.S. Sen. Bob Corker said Wednesday that the VW plant expansion would not have happened had the union won the factory’s February election.

Further from the Chattanooga TFP:
“What I know for a fact … the announcement would not have occurred for a lot of reasons,” Corker said. “Plenty of people in Germany understood the impact.”

One reason Corker cited was concerns raised by Republican state lawmakers about the UAW and the election process at the plant.

“Look at where the General Assembly was,” the former Chattanooga mayor said.

State House Speaker Beth Harwell, R-Nashville; House Majority Leader Gerald McCormick, R-Chattanooga; and Senate Speaker Pro Tempore Bo Watson, R-Chattanooga, said just prior to the vote that state incentives for the expansion would be in jeopardy should the UAW win the election.

Gary Casteel, the UAW’s secretary-treasurer, said Wednesday he doesn’t know if lawmakers would have “killed off 2,000 jobs” over an ideological position against unionizing the plant.

But, he said, VW doesn’t have a problem with union representation at the factory.

“VW and the UAW negotiated an election agreement. They didn’t have to do that. VW gave us access [to workers during the election]. It had a neutral stance,” Casteel said. “If they had a hesitance, why did they do all those things?”

Last month, VW said it would assemble a new sport utility vehicle in Chattanooga. It will invest $900 million, including $600 million in the city, and employ another 2,000 people. The state said it is providing $177.8 million in grants and training assistance as part of the $274.2 million incentive package for the expansion.

The UAW lost the February organizing vote, 712 to 626 margin. In June, the UAW set up a non-dues-paying local in Chattanooga and started signing up members.

Casteel said the local has signed up “substantially more” than 670 members, which would have been enough to win the election.

Earlier, he said that if the local signed up a meaningful portion of VW’s Chattanooga work force, “we’re confident the company will recognize Local 42 by dealing with it as a members’ union that represents those employees who join the local.”