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Tennessee legislator believes governor offered VW deal to keep UAW out

By Bernie Woodall

DETROIT (Reuters) - A Tennessee state legislator is trying to prove that the governor promised Volkswagen AG additional incentives if the company kept the United Auto Workers union out of its two-year-old Chattanooga plant.

Rep. Mike Turner, head of the Democratic Caucus in the Tennessee House, has asked Gov. Bill Haslam's office to turn over communication between the governor's office and Volkswagen. Turner said Tennessee state law requires legislative approval to provide such incentives.

Turner said that he "has it on good authority" that Haslam has told VW officials that Tennessee will sweeten the deal for the company if it can stave off the UAW.

"I've never seen a so-called conservative free market business person using government to interfere in a private matter for the Volkswagen corporation," said Turner in a telephone interview with Reuters on Thursday. "That smacks of Socialism."

Haslam, a Republican, has spoken against the unionization of the 2,500 Volkswagen workers in Chattanooga.

Volkswagen and the United Auto Workers earlier this month said they are in talks about the U.S. union's bid to represent workers at Chattanooga, which would be a milestone in the UAW's long-running effort to organize foreign-owned auto plants.

Specifically, Turner is asking for any correspondence that "pertains to any incentives for Volkswagen or the discussion of unionization of current or future Volkswagen employees," according to a Freedom of Information Act request Turner filed with Haslam's office on Tuesday.

Haslam and the governor's office will work to fulfill Turner's request, David Smith, the governor's press secretary, said in an email.

Smith did not address Turner's allegations about incentives, saying the governor's office does not talk about specific projects but will "continue to work with Volkswagen to bring more jobs to Tennessee."

Earlier this week, Bob Corker, a U.S. Republican senator from Tennessee and former mayor of Chattanooga, said VW would be harming itself if it allows the UAW to represent workers at the plant, and that the company would be a "laughingstock in the business world."

But Turner said the state could lose jobs if Tennessee, where the legislature is controlled by Republicans, plays a hand in keeping a U.S. union out of the plant in Chattanooga.

"I think it could hurt us when other European companies think about locating in Tennessee," said Turner, whose father was a UAW member at a now-closed Ford Motor Co glass plant in Nashville.

A Volkswagen spokesman said the company does not comment on incentives from Tennessee or any government.

Large auto plants in the United States generally receive large tax breaks and other incentives from states where they are located.

Volkswagen will receive as much as $707 million of state and local incentives from tax credits over 20 years and property tax breaks over 30 years as well as assistance to pay for worker training, utility infrastructure as well as the donation of the property where the plant sits, according to a document provided by Turner's office.

(Reporting by Bernie Woodall; Editing by Bob Burgdorfer)

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