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CHATTANOOGA — In a move that is unusual but not unprecedented, the United Auto Workers union has sidestepped its loss in a worker vote in February and created a local union to represent workers at the Volkswagen plant in Tennessee.

And what's surprising, considering decades of fierce anti-union efforts from the other foreign-transplant automakers in the South, this time the union has the tacit approval of Volkswagen itself.

"We have a consensus agreement with Volkswagen management to form the local and be recognized when we get a majority of the workers to join," said UAW International Secretary-Treasurer Gary Casteel of Ashland City, who has been overseeing the union's organizing drives at the Southern auto plants for the past several years — unsuccessfully, until now.

The union's move also creates some uncertainly over Volkswagen's continuing negotiations with the state of Tennessee on a proposed $300 million incentives package to persuade the world's largest automaker to to build a new crossover utility vehicle in Chattanooga, a move that could bring hundreds of millions in new investment and create hundreds more jobs.

UAW International President Dennis Williams announced the formation of Local 42 during a charter-signing ceremony Thursday afternoon at the union's offices a few miles from the plant, where 1,500 workers assemble the Volkswagen Passat sedan.

Williams said the union had two reasons for establishing the new chapter in Chattanooga:

First, the February vote was a narrow loss — 53 percent to 47 percent — and the result showed strong support among workers, despite heavy opposition from outside groups and Tennessee legislators.

Second, the UAW said it already had signed cards from a majority of the workers prior to the election, saying they favored representation.

The union took that as a mandate to represent any workers who want to join the new local, even though membership will be voluntary and, for now, no dues will be collected.

"We said we wouldn't give up on these workers, and we're not going to," Williams said. He pledged the union would work with Volkswagen to train and educate workers so they would be the best the automaker could get.

Anti-union groups that helped orchestrate the union's defeat in February called Thursday's move "troubling" and vowed to continue their fight against representation by the Detroit-based labor union.

That the UAW would go ahead with organizing at Volkswagen despite losing the election was "not unexpected" though, said Matt Patterson, president of the Center for Worker Freedom, one of the groups that has campaigned here relentlessly against the union.

"I've been beating that drum ever since the election," Patterson said. "I'm extremely disappointed that the union is not respecting the wishes of the workers, who said loudly and clearly they did not want the UAW in their workplace. If the union truly respects the workers, like they say they do, then they will respect the decision these workers made."

Patterson said he had never heard of a union going ahead and setting up shop even though it had lost an election, but Williams said it was a common tactic earlier in the UAW's history.

"But we haven't done it for many, many years," he said.

Casteel also hinted the UAW might try a similar tactic in its current organizing drives at other Southern auto plants, particularly the Nissan facility in Canton, Miss.

The union has tried several times — and lost by lopsided votes — to organize at the Nissan plant in Smyrna, but it's now running a campaign at the Mercedes-Benz plant in Vance, Ala., as well as at the Nissan plant in Canton.

"I don't know of any case like this, but the whole situation in Chattanooga is bizarre and unique," Patterson said. "They wouldn't be doing this if they didn't have the tacit approval of Volkswagen management."

He said he would be returning to Chattanooga and "talking to some folks about what we can do about this."

Casteel said the union is expecting the state to honor its earlier promise not to let the outcome of the UAW organizing drive influence its willingness to provide tax breaks and other incentives for the plant's expansion.

"We would fully expect that the state would respect the wishes of the workers," Casteel said.

At Thursday's event, more than 15 Volkswagen workers signed the charter forming the new UAW local.

"This something we're doing for ourselves," said Kay Gray of Ooltewah, a Volkswagen assembly worker for the past three years.

Still to be determined is how the union can help Volkswagen establish an employee works council at the Chattanooga plant like those at most of its other plants worldwide. It was the automaker's desire to form such a council at the Chattanooga plant that led to talks with the UAW beginning about two years ago. U.S. labor law requires works councils to be formed under guidance of a union.

The UAW initially filed a challenge to the February election results with the National Labor Relations Board, claiming that outside influence by Republican politicians in Tennessee, including U.S. Sen. Bob Corker, a Chattanooga Republican and former mayor, and Gov. Bill Haslam, tainted the vote by tying the state incentives to the outcome of the election.

But the UAW dropped its challenge in April, on the morning a hearing was scheduled by the NLRB, and has been negotiating with Volkswagen officials in Germany to try to work out a way to gain representation at the plant without winning a formal election.

The decision to go ahead and form a local union was made this week, although the union has been considering the move since just after the February vote, UAW officials said.

Although there is no formal recognition by Volkswagen that would let the union represent the entire hourly workforce at the plant, there is a "consensus" agreement between the automaker and UAW, Casteel said.

"What there won't be is exclusive representation," he said.

Unlike exclusive representation, any contract approved with the UAW at the Chattanooga plant under this setup would apply only to union members, Casteel said.

"This is a good thing for us because it's members-only bargaining, and our members might get something in the contract that the rest of the employees won't get."

Reach G. Chambers Williams III at 615-259-8076 or on Twitter @gchambers3. Reporter Chas Sisk contributed to this report.

RESPONSES

VW's statement:

"Just like anywhere else in the world, the establishment of a local organization is a matter for the trade union concerned. There is no contract or other formal agreement with UAW on this matter."

Gov. Haslam responds:

"It is most appropriate for the company to speak for itself on this issue," said David Smith, a spokesman for Gov. Haslam. "Our understanding is that there is no agreement between the company and the UAW."

House Democratic Caucus Chairman Mike Turner (D-Nashville):

"The ultimate choice on whether to join with the union or works council still rests with the workers. As elected officials, we should not interfere with their legal rights to make this decision, and should pledge to work with the company and their workers regardless of their decision."

Tennessee Democratic Chairman Roy Herron:

" I hope that Republican politicians will not continue to interfere in this company's business and these workers' opportunities. Such ideological intransigence already has jeopardized the plant's expansion and threatened one thousand new Tennessee jobs. I call on Governor Haslam and Senators Alexander and Corker to stop risking a thousand new jobs and close the deal before they export those jobs to Mexico."

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