Kentucky Governor Steven Beshear has a message for any German carmaker or supplier considering expanding into the South: Labor unions are welcome, at least in his state.
With 1.2 million vehicles built in 2013, Kentucky ranked third behind Michigan and Ohio for most vehicles produced in a U.S. state.
Ever since Ford started assembling the Model T in Louisville in 1913, Kentucky has a century of history and experience building cars. And dealing with unions.
Beshear, himself a Democrat, suggested that had Volkswagen located its Passat plant in Kentucky rather than in its southern neighbor, Tennessee, attempts by Germany’s IG Metall and the UAW to organize the workforce would never have become the divisive issue it is today.
“We would welcome them to Kentucky,” Beshear told Automotive News Europe in an interview on the sidelines of a symposium in Bochum. “We have very successful companies that are unionized, for instance Ford and GM that have a national contract with the UAW. We also have companies like Toyota that have no unions and are highly successful.”
Tennessee Governor Bill Haslam and Senator Bob Corker, both conservative Republicans, have staunchly opposed the UAW establishing a foothold in VW’s Chattanooga plant, fearing outside businesses would shun the state as a result.
Corker went so far as to say the Volkswagen risked becoming a "laughingstock" after the automaker sought to create a German-style works council with the help of UAW.
By comparison, Beshear is a pragmatic man -- right after rattling off fun facts such as 95 percent of all the world’s bourbon is distilled in Kentucky -- he just as proudly states that one of the state’s most iconic bourbon makers, Jim Beam, is owned by Japanese spirits and soft drinks group Suntory.
“We’ve worked hard over my seven years to really accelerate the growth of jobs in Kentucky and a big part of that has been foreign direct investment, and much of that FDI has been in the automotive industry,” he said.
“In Kentucky you can decide to do whatever you want to, and we will be supportive of it. We would never have a situation in Kentucky like that which occurred in Chattanooga -- and will never as long as I am governor,” he added.
Since Beshear is conscious of the fierce competition to win new car plants from other automakers, he aims to convince the lesser-known champions of Germany’s Mittelstand -- small companies that are world leaders in their respective niches -- to come to his state.
“We’ve been very successful over the last three to four years with small and medium-size manufacturers from Germany, many family owned and mostly from the automotive sector,” he said.
According to Beshear, a key criterion is the feeling that they can play an active part and be relevant in a small town community like they are used to back home.
“When they come to Kentucky they find the same kind of atmosphere and environment,” the governor said.
“They enjoy the fact that they will be in place where they can make a difference, as opposed to a very large metropolitan area where nobody may even know who they are. I think that is the role they have played in their community here in Germany for years and years.”