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UAW Falls 87 Votes Short Of Major Victory In South

Just 87 votes at the Volkswagen plant in Tennessee separated the United Auto Workers union from what would have been its first successful organization of workers at a foreign automaker in the South. Instead of celebrating a potential watershed moment for labor politics in the region, UAW supporters were left crestfallen by the 712-626 vote against union representation in the election that ended Friday night. The result stunned many labor experts who expected a UAW win because Volkswagen tacitly endorsed the union and even allowed organizers into the Chattanooga factory to make sales pitches. The loss is a major setback for the UAW's effort to make inroads in the growing South, where foreign automakers have 14 assembly plants, eight built in the past decade, said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research, an industry think tank in Michigan. "If this was going to work anywhere, this is where it was going to work," she said of the Volkswagen vote. Organizing a Southern plant is so crucial to the union that UAW President Bob King told workers in a speech that the union has no long-term future without it. The loss means the union remains largely quarantined with the Detroit Three in the Midwest and Northeast. Many viewed VW as the union's best chance to gain a crucial foothold in the South because other automakers have not been as welcoming as Volkswagen. Labor interests make up half of the supervisory board at VW in Germany, and they questioned why the Chattanooga plant is the company's only major factory worldwide without formal worker representation. VW wanted a German-style "works council" in Chattanooga to give employees a say over working conditions. The company says U.S. law won't allow it without an independent union. In Chattanooga, the union faced stern opposition from Republican politicians who warned that a UAW victory would chase away other automakers who might come to the region. Sen. Bob Corker of Tennessee was the most vocal opponent, saying that he was told that VW would soon announce plans to build a new SUV in Chattanooga if workers rejected the union. That was later denied by a VW executive, who said the union vote had no bearing on expansion decisions. Other state politicians threatened to cut off state incentives for the plant to expand if the union was approved.

Which will Dieselgate hurt more, Volkswagen or US diesels?

The most damning response to the news Volkswagen skirted emissions regulations for its diesel models may have actually come from the Los Angeles Times. On Saturday, the Times published an editorial titled "Did Volkswagen cheat?" The answer was undoubtedly yes. When you can't drive down Santa Monica Boulevard without seeing an average of one VW TDI per block, the following words are pretty striking: "... Americans should be outraged at the company's cynical and deliberate efforts to violate one of this country's most important environmental laws." VW has successfully cultivated a strong, environmentally conscious reputation for its TDI Clean Diesel technology, especially in states where emissions are strictly controlled. A statement like that is like blood all over the opinion section of the Sunday paper. The effect on VW's business, even Germany's financial health, was already felt Monday when the company's shares plummeted 23 percent in morning trading. The statement on Sunday from VW CEO Dr. Martin Winterkorn says "trust" three times. That probably wasn't enough in nine sentences. Writers over the weekend have compared VW's crisis to one at General Motors 30 years ago, when it was the largest seller of diesel-powered passenger cars until warranty claims over an inadequate design and ill-informed technicians effectively pulled the plug on the technology at GM. In a sense, VW is in the same boat as GM because it has fired a huge blow into its own reputation and that of diesels in passenger cars. And just as automakers like Jaguar Land Rover, BMW and, ironically, GM, were getting comfortable with it again in the US. VW of America was already knee-deep in its other problems this year. Its core Jetta and Passat models are aging and it needs to wait more than a year for competitive SUVs that American buyers want. The TDIs were the only continuous bright spot in the line and on the sales charts. Even as fuel prices fell and buyers shunned hybrids, VW managed to succeed with diesels and show that Americans actually care about and accept the technology again. Fervent TDI supporters might actually lobby for that maximum $18 billion fine to VW. I've personally convinced a number of people to look at a TDI instead of a hybrid. Perhaps not so much for stop-and-go traffic, but I know buyers who liked the idea that a TDI drove like a normal car and wasn't packed with batteries.

VW and partner SAIC start building $2.5B Audi plant in China

BEIJING — Volkswagen AG's China joint venture with SAIC Motor Corp has started building a $2.5 billion new energy vehicle (NEV) plant in Shanghai, which will make VW's luxury Audi brand cars, a possible first for the venture. The new plant is a key step for Audi to diversify production of its cars in the world's largest car market from its long-standing local partner, China FAW Group Corp. This shift has been delayed amid resistance from local dealers. SAIC Volkswagen said the new plant would have an annual capacity to make 300,000 cars and begin production from 2020. Audi sold 481,387 vehicles in China from January to September this year. The announcement comes the same week Tesla secured a Shanghai location for a Gigafactory battery plant to serve the Chinese market. Audi unveiled the plan to bolster ties with SAIC in late 2016. Earlier this year, the Germany luxury carmaker bought a 1 percent stake in the SAIC Volkswagen venture, paving the way for the joint venture to produce and sell Audi cars. Volkswagen currently gets a larger proportion of the proceeds from the 50-50 tie-up with SAIC than from its 40 percent stake in the venture with FAW. SAIC Volkswagen said in a statement on Friday the plant would cost 17 billion yuan ($2.5 billion) and would make VW and Skoda models as well as Audi cars. It will help VW tap China's fast-growing market for NEVs, a category comprising electric battery cars and plug-in electric hybrid vehicles. ($1 = 6.9314 Chinese yuan renminbi) Reporting by Yilei Sun and Adam JourdanRelated Video: Image Credit: Reuters Green Plants/Manufacturing Audi Volkswagen Skoda Electric Hybrid