6/23/08

VW-UAW dues rumor sours Alabama

Union-friendly car maker insensitive to local preference for worker-choice

An adverse report from the Governmental Accountability Office already has torpedoed Alabama’s expectations of a 1,500-job Air Force tanker assembly plant in Mobile. Now there’s doubt that a 2,000-worker Volkswagen plant will be constructed in the northern end of the state.

Officials had counted on one or both of the plants to help pull the state out the economic nosedive that threatens to wreck budgets next year. Now it looks as if they’d better move swiftly to formulate a Plan B.

The GAO report said the Air Force made substantial errors in the bid process that made Northrop Grumman the winner of a $40 billion tanker contract that includes the plans for the Mobile assembly plant. The likelihood is that the project now will have to be rebid, with many observers saying that longtime supplier Boeing will get the award.

There has been no final decision on the Volkswagen contract either, but insiders say it’s beginning to look sour for Alabama, which is competing for the factory with Tennessee and Michigan.

A site in Limestone County near Huntsville has been offered. However, an article last week in the Mobile Press-Register said state leaders have been unsettled by reports that Volkswagen has made an agreement with the United Auto Workers. Alabama is a right-to-work state in which workers are not required to join unions as a precondition for employment.

That fact, along with hefty incentives, has given Alabama an advantage in recruitment of automotive jobs. But Volkswagen has a longtime relationship with the UAW and any deal that may have been cut would give Michigan the edge in landing the plant.

Volkswagen declined comment on the report, but a state official said the union issue was to be discussed at a meeting between Gov. Bob Riley and company officials in Huntsville on Thursday.

State leaders have said they hope the major industrial projects will jump-start the state’s economic recovery. But the now shaky prospects for both must be considered with other adverse developments.

The worst of these is the hole in the budget caused by oil and gas extraction litigation. Stung by a court decision in favor of Exxon Mobile Corp., Riley sought a tax increase on natural gas wells off the Alabama coast. It would have raised about $40 million for the state General Fund budget. But it died in the Legislature.

There also is a legal challenge over Riley’s plan to put $63 million in interest from oil and gas drilling into the General Fund. The case is on appeal after a circuit judge issued a preliminary injunction against the transfer.

Meanwhile, tax collections for education for the first eight months of this fiscal year grew by just

0.2 percent, far less than expected.

It’s not time to panic. But with schools, courts, prisons, health and other essential government functions in jeopardy, leaders can’t simply cross their fingers and hope for the best.

(tuscaloosanews.com)

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