VW narrows search to worker-choice states

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If Volkswagen AG decides to build its U.S. assembly plant in the South, the German company will join other foreign automakers that are increasingly turning the region into a hotbed of car manufacturing.

The South offers automakers ample highway and rail systems and proximity to the large market of consumers. But the region's main attraction, however, is that auto plant workers have rejected overtures by labor union UAW.

"Foreign-owned automakers have been a tough nut for the UAW to crack, and the South is particularly difficult," said Harley Shaiken, a University of California, Berkeley, professor who specializes in labor issues. "That is without question an important part of their location decision."

Volkswagen's plant will be part of the company's strategy to increase its presence in the U.S., where the maker of the Jetta and Beetle holds just 2 percent of the market.

VW executives have narrowed their site options to Alabama and Tennessee, as well as Michigan. All three states are offering incentive packages. The automaker's representatives and economic development officials won't discuss the site search.

Volkswagen's supervisory board, the equivalent of a U.S. board of directors, is scheduled to meet Tuesday, with an announcement expected soon afterward.

Industry executives and analysts say there is plenty of room in the South, where foreign auto plants have been locating since Nissan Motor Co. set up shop in Smyrna, Tenn., in 1983.

Analysts say the region could provide another 2,000 skilled workers, as could Michigan, where cost-cutting U.S. companies have idled thousands of autoworkers.

American Honda Motor Co. spokesman Ted Pratt said Volkswagen or anybody coming into the South "will find what we found: a great quality of life and a great work force."

Honda set up operations in Alabama in 2001, and the assembly plant Kia Motors Corp. plans for West Point, Ga., will be about 100 miles away. Two likely Volkswagen plant sites, in Chattanooga, Tenn., and Huntsville, Ala., also are about 100 miles from the Honda plant.

Pratt said the plants seem "spread apart far enough so we are not pulling from the same labor pool."

Spokesmen from Nissan Motor Co.'s North American plant in Nashville, BMW's plant in Greer, S.C., and Honda's Lincoln, Ala., factory also said their companies don't worry about the region becoming crowded with automaking.

David Cole, who runs the Center for Automotive Research, said a U.S. location is more competitive than ever in the current global economy and that compared with Mexico, U.S. workers are better educated.

Volkswagen's only North American plant is in Puebla, southeast of Mexico City, where union workers staged a five-day strike in 2006 for better wages and benefits.

The issue with unions isn't wages. Auto production line work in the U.S. pays about $27 an hour in union and nonunion facilities, Cole said.

Erich Merkle, vice president of auto industry forecasting for the consulting company IRN Inc., said the issue with unions is they go on strike.

Employees at Nissan's Smyrn plant voted down a UAW organizing effort in 2001. The union has made failed attempts to get a foot in the door at the Toyota plant at Georgetown, Ky.

Last year, Honda executives sent letters to employees at its plant in Lincoln, Ala., warning that any move toward organizing would "radically change" operations.

Attica Scott, coordinator of the Kentucky Jobs With Justice organization that supports unions, said the UAW has to educate workers about the benefits of "having a voice on the job."

(statesman.com)