VW labor chief says Chattanooga model hinges on works panel

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BERLIN (Reuters) -- Volkswagen's top labor leader, Bernd Osterloh, lent weight to efforts by the United Auto Workers union to represent workers at the automaker's U.S. plant, an issue that has raised opposition among some politicians and union critics.

Volkswagen wants German-style labor representation at the plant in Chattanooga, Tennessee, and has held talks with the UAW. The union is keen to boost its declining membership and get a toehold that could allow it to expand among all foreign-owned auto companies in the United States.

And in a sign of political opposition, U.S. Senator Bob Corker, a Republican, was quoted by Handelsblatt on Monday as saying it would be one of VW's "biggest mistakes" to allow the UAW to organize workers in Chattanooga.

But Osterloh, who is head of VW's global works council, said he would keep talking with the UAW and that forming a council was important if the plant wanted a second model in the future.

"We know how important that vehicle is for Chattanooga," Osterloh, who as deputy VW chairman has a say on production decisions, added in a statement of the plant, which builds the Passat mid-sized sedan.

"In the interest of our U.S. colleagues, we're open to such an allocation (of an order)." Osterloh, also a member of the IG Metall engineering union, said the UAW was prepared to cede some of its rights to a works council.

Osterloh said he wanted to engage Republicans and Democrats about a works council model once legal issues were clarified. He stressed the VW principle of involving staff and management in running plants, called co-determination, was not negotiable.

He said he plans to meet politicians and other supporters and opponents of the UAW over the next weeks on a visit that had to be changed after his plane was grounded.

The UAW would like VW voluntarily to recognize the U.S. union as the best choice to represent workers in Tennessee.

Some 88 of VW's 104 plants worldwide have works councils. U.S. labor law requires that any such council be recognized through a U.S. trade union. Tennessee Gov. Bill Haslam and Corker are both seen as anti-UAW.

A UAW success at Chattanooga could alter the landscape of the U.S. auto sector and open the door to similar efforts at plants owned by Germany's Mercedes in Alabama and BMW in South Carolina, and possibly those owned by Japanese and South Korean automakers, analysts have said.

Corker has come out against any UAW influence over car plants in the South because he gives the union part of the blame for the demise of Detroit as the heart of U.S. auto production.

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