Chattanooga mayor: Don't 'let politics trump jobs'

Mayor Andy Berke: "I'm committed to doing everything possible to make sure that we don't let politics trump jobs."
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CHATTANOOGA, Tenn. -- Regardless of how Volkswagen workers vote on UAW representation, Chattanooga's mayor has just one thing on his mind: winning a plant expansion to build a new SUV.

In an interview with Automotive News today, Mayor Andy Berke said he wants to make sure state and local leaders won't let the UAW vote influence their discussions on a deal with Volkswagen's German head office to have the Chattanooga plant build the mid-sized SUV due to go on sale in 2016.

Earlier this week, a pair of Tennessee lawmakers said they don't expect the state Legislature to approve subsidies if workers back the UAW, given that Republicans hold the union in low regard.

"The taxpayers of Tennessee reached out to Volkswagen and welcomed them to our state and our community," state House Majority Leader Gerald McCormick, a Republican from Chattanooga, said in an e-mail to Automotive News. "We are glad they are here. But that is not a green light to help force a union into the workplace. That was not part of the deal."

Berke appears determined to unlink the two issues.

"I'm committed to doing everything possible to make sure that we don't let politics trump jobs," he said. "After this vote is over -- whichever way it goes -- I'm going to press ahead with trying to close the deal."

To sweeten the deal for VW, officials would usually put together a package of incentives, like the nearly $580 million package offered to VW in 2008 to build the plant. The incentives help offset Chattanooga's cost disadvantage compared with Mexico, which is also in contention to build the coming SUV. Mexico has lower wages and no tariffs for engines imported from Europe or finished vehicles exported to Europe.

Berke said Chattanooga is the perfect site for the SUV, given that it will be primarily a North American product. He said expanding the plant's capacity would make the entire operation more profitable, including Passat production, by spreading fixed costs across a larger number of vehicles.

Berke, a Democrat, might be expected to support the UAW, given its historical support for the party. Yet he has remained neutral on the vote.

"This is a decision for VW and its employees," Berke said. "That's what I've always felt. I assume that at the end of the day, these employees are going to decide what they think is best for the plant."

You can reach Gabe Nelson at gnelson@crain.com.


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