NASHVILLE, Tenn. (AP) -- Republican Gov. Bill Haslam said Wednesday that making a $300 million incentive package for Volkswagen subject to labor talks concluding to the state's satisfaction was not a threat but a "statement of reality" about the political landscape in Tennessee.
Haslam stressed to reporters that any grants and tax credits offered to encourage the German automaker to build a new SUV in Chattanooga rather than in Mexico would have to be approved by the Republican-controlled Legislature, where its fate would be uncertain if the United Auto Workers union began representing workers.
The state "wanted something that could be approved in the Legislature and was good for the state," Haslam said. "That's not unreasonable."
Workers at the Chattanooga plant in February narrowly rejected UAW representation, though the union is challenging that outcome with the National Labor Relations Board on allegations that politicians and "outside special interest groups" swayed the election.
The state said in its August 2013 incentive offer, which was first reported by WTVF-TV, that the offer was contingent on labor talks "being concluded to the satisfaction of the State of Tennessee."
About three weeks after the incentive offer, Haslam was asked directly by reporters whether the state had linked the package for the Volkswagen plant to the automaker's rejection of the UAW. Haslam's answer: "We did not."
UAW regional director Gary Casteel said the document confirmed the union's claims of a coordinated anti-union campaign.
"It's obvious that the state was threatening or at least intimidating Volkswagen," he said.
Haslam on Wednesday disputed that allegation.
"It wasn't a threat at all," he said. "It was just a statement of reality."
The governor said in all discussions with Volkswagen it had been made clear that if the UAW gained a foothold at the plant "it was going to be much, much more difficult" to get the Legislature to approve the incentives. But Haslam maintained that a UAW win would not have scuttled state incentives for the plant.
"We never, ever have said if the UAW vote is approved we're not doing a deal there. Ever," he said. "We've been real clear that that's not at all true."
Chattanooga is the only one of Volkswagen's major global operations that has no formal worker representation, a major issue for the company's supervisory board, half of whose members represent labor interests.
Volkswagen wants to establish a German-style works council at the plant representing both blue- and white-collar workers. But the company says its reading of U.S. law would require an independent union to create such a council.
While Republican politicians including Tennessee's U.S. Sen. Bob Corker and some workers at the plant called for the involvement of a union other than the UAW, a move by another established union to represent workers at an auto plant would be highly unlikely.
Haslam said the incentive package expired before the February union vote, and that there is no current offer on the table. The governor said he has asked that future talks be conducted by a company representative with final decision-making power.
"We're ready to have those conversations, and they said, 'We'll get back to you at the appropriate time,'" he said. "And that time hasn't happened yet."
A spokesman for the Chattanooga plant declined to comment. Volkswagen has announced plans to invest $7 billion in North America over the next five years.
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