Workers at the VW plant, which builds the U.S. version of the Passat sedan, voted 53 percent -- 712-626 -- to reject UAW membership in balloting that ended on Valentine's Day. The vote in the traditionally anti-union South was one of the closest watched unionization efforts in recent years because the employer was publicly neutral on the union, while Tennessee politicians in the "right-to-work" state vigorously opposed it.
On Wednesday, Bernd Osterloh, a top labor leader at Volkswagen AG in Germany, vowed to continue the fight for a German-style works council at the Tennessee plant.
Works councils, which exist in nearly all 105 other VW plants worldwide, typically deal with workplace issues like scheduling and safety, vacations, grievances and represent workers in labor-management disputes and planning.
In an interview with the German newspaper Sueddeutsche Zeitung, Osterloh blamed the UAW's defeat in Tennessee on anti-union pressure by outsiders and said he is working with the United Auto Workers on bringing an employee works council to the factory.
"Outside conservatives created a massively anti-union sentiment," he said in a statement. "It's possible that one would come to the conclusion that this influence represents an "unfair labor practice."
In Germany, workers hold half the seats on the world's No. 2 automaker's 20-member supervisory board. Osterloh indicated they would be reluctant to approve more plants in the U.S. South without an agreement on employee representation being part of the deal.
As he put it, while it makes sense for Volkswagen to open another U.S. plant it "does not necessarily have to be assigned to the South again." VW plans to introduce a new SUV for the U.S. market in 2016 but has said nothing about where it will be assembled. Mexico is considered a likely contender.
Tennessee gave Volkswagen more than $500 million in incentives to build the Chattanooga plant, which opened in 2011 helping create thousands of good-paying, middle-class jobs locally and generating more than $50 million in new state and local tax revenue a year.
The plant's 1,600 workers earn around $27 an hour including benefits.
Labor leaders meeting in Houston last week blamed Tennessee Republicans, led by Sen. Bob Corker, for the UAW's loss but the organizing director for the AFL-CIO said workers were "certainly not going to be deterred" from unionizing in the South, the Wall Street Journal reported.
Before the UAW vote, Corker, a former mayor of Chattanooga, had said WV executives told him the plant would get a second line for a new SUV if workers rejected UAW representation. Tennessee Gov. Bill Haslam said auto parts suppliers would not come to the region if the plant brought in the union.
On Friday, the UAW filed a 58-page document asking the National Labor Relations Board to conduct a new election, calling Corker's conduct "shameful and undertaken with utter disregard for the rights of the citizens of Tennessee and surrounding states that work at Volkswagen Chattanooga."
Corker said the union's action may slow down Volkswagen's decision on where to build an SUV. "The UAW is only interested in its own survival and not the interests of the great employees at Chattanooga's Volkswagen facility nor the company for which they work," he said in a statement.
The New York Times said Frank Fischer, chief executive officer and chairman of Volkswagen Chattanooga, indicated Volkswagen wants a works council for the plant.
"There is no connection between our Chattanooga employees' decision about whether to be represented by a union and the decision about where to build a new product for the U.S. market," said he said in a statement.
Last fall, a majority of the rank-and-file employees signed union sign-up cards authorizing the vote.
Obama orders new truck fuel standards
U.S. President Barack Obama last week announced the next phase of mileage standards for the nation's fleet of medium- and heavy-duty trucks.
In a speech at a distribution center for the supermarket chain Safeway in Upper Marlboro, Md., the president said he has ordered the Environmental Protection Agency and the National Highway Traffic Safety Administration to develop and issue new fuel efficiency and greenhouse gas regulations for larger trucks (weighing 8,500 pounds or more) by March 31, 2016.
"Today, we're taking the next step. Heavy-duty trucks account for just 4 percent of all the vehicles on the highway ... [but] they're responsible for about 20 percent of carbon pollution in the transportation sector. And because they haul about 70 percent of all domestic freight ... every mile that we gain in fuel efficiency is worth thousands of dollars in savings every year," he said.
The administration estimates tighter fuel standards for medium- and heavy-duty trucks, school buses and 18-wheel big rig tractor-trailers for model years 2014-18 will save owners and operators an estimated $50 billion in fuel costs and save 530 million barrels of oil over the life of the vehicles.
The U.S. is already committed to doubling the fuel efficiency of light vehicles and trucks to more than 50 mpg by 2025.
"Improving gas mileage for these trucks is going to drive down our oil imports even further," he said.
The president's push for improved fuel economy comes days after a study published in the current edition of the journal Science found leaks in the U.S. natural gas system are dumping heat-trapping methane gas into the atmosphere.
Scientists at Stanford University, the Massachusetts Institute of Technology and the Energy Department's National Renewable Energy Laboratory concluded the leak rate is so great it may negate the value of converting heavy-duty trucks and buses from diesel fuel to compressed natural gas to slow the rate of climate change.
"If natural gas is to be a 'bridge' to a more sustainable energy future, it is a bridge that must be traversed carefully: Diligence will be required to ensure that leakage rates are low enough to achieve sustainability goals," the researchers wrote.
"Fueling trucks and buses with natural gas may help local air quality and reduce oil exports, but it is not likely to reduce greenhouse gas emissions," chief researcher Adam R. Brandt of Stanford University said in a release.
Toyota No. 1 in global sales, VW moves ahead of GM
Japanese automaker Toyota sold a record 9.98 million vehicles worldwide in 2013, retaining the title of world's largest auto company.
Germany's Volkswagen edged General Motors for the No. 2 spot, selling 9.73 million vehicles to GM's 9.71 million.
Toyota sales were up 2.4 percent last year and the company projects sales exceeding 10 million units in 2014. Volkswagen sales jumped 5 percent, selling just 270,000 fewer vehicles than Toyota, and GM saw its sales rise about 4 percent.
VW's sales figures include heavy-duty truck sales of its MAN SE and Scania AB units, while Toyota included sales from its Hino Motors and Daihatsu units, the Detroit News reported.
GM was the world's largest auto company from 1931 through 2007 and reclaimed the title in 2011 when an earthquake and tsunami in Japan and flooding in Thailand reduced Toyota's production capacity.
Volkswagen sales fell 7 percent in the United States last year -- about 100,000 fewer vehicle sales than GM -- but the German automaker's new head of U.S. operations says VW can sell 800,000 vehicles in the United States in four years.
VW currently makes more than 72 percent of the vehicles it sells in the United States in North America and plans to invest $7 billion in the region over five years.