NASHVILLE, Tenn. -- Tennessee officials may have used the offer of $300 million in state incentives as leverage to keep the United Auto Workers from being recognized at Volkswagen's Chattanooga plant without a formal vote, an internal email suggests.
Or not, if you believe Tennessee Gov. Bill Haslam.
The email, obtained under Tennessee's Public Records Act, was part of an exchange as Haslam’s communications team struggled to find the right words to explain a document that had been leaked to NewsChannel 5 Investigates. That document revealed that the $300 million offer to Volkswagen for a proposed expansion was "subject to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee."
That offer was made in August 2013 as Volkswagen negotiated with the UAW about forming a workers council to help run the Chattanooga plant.
"During that same time period, some Volkswagen workers complained they were misled into signing union cards," said a proposed statement drafted by Economic and Community Development (ECD) Commissioner Bill Hagerty and his staff. "The language in the incentive offer addresses concerns we had at the time about process."
In fact, the UAW had indicated during that same time period that enough VW workers had signed their names for a petition process -- known as "card check" -- to get recognized as the workers' official representative at the plant.
Union opponents wanted a secret-ballot election, which they rightly predicted would give them a better chance of defeating the union.
As the administration debated what to say about the leaked incentives offer, Hagerty spokesman Clint Brewer emailed the governor's communication staff that his boss was "committed to the approach we take in our initial proposed response and believes the offer sheet language needs to be explained."
Yet, that reference to workers complaining about being "misled into signing union cards" was deleted from the final statement approved by the governor's office.
Last week, Gov. Bill Haslam insisted that -- despite the words of his own commissioner -- the incentive offer was "absolutely not" used as leverage to pressure Volkswagen to reject the card-check process.
Still, that email – and the governor’s denial that it reflects his administration's viewpoint -- are a prime example of the continually shifting series of explanations that the Haslam administration has given about its involvement (critics would say "interference") in Volkswagen’s talks with the UAW.
Contingent On Process Or Outcome?
In September 2013, the governor emphatically denied allegations from Democrats that state incentives for Volkswagen were tied to a rejection of the UAW. Here’s how the Chattanooga Times-Free Press reported it:
Gov. Bill Haslam said Wednesday he has not offered specific incentives for Volkswagen’s Chattanooga plant to resist efforts by the United Auto Workers to unionize the factory.
“We did not,” Haslam told reporters in Nashville.
But, on March 31st, NewsChannel 5 Investigates revealed the document showing that the administration had indeed offered $300 million to Volkswagen in August 2013, "subject to works council discussions between the State of Tennessee and VW being concluded to the satisfaction of the State of Tennessee."
So what did that mean?
ECD's official statement put the focus on "concerns we had at the time about process," adding that "the offer did not preclude the creation of a works council or union representation as a condition for the incentives."
On April 1st -- the morning after the story broke -- Haslam communications director Alexia Poe prepared talking points that stated: "We never have made any different financial offer -- for more or less -- based on whether the company unionized or not. The satisfactory verbiage in the letter was a repeat of what we've said publicly, the outcome matters/mattered to the state."
While it is not known exactly what she meant, Tennessee Republicans had tried to walk a fine line, suggesting that they did not necessarily oppose unions -- just the UAW.
That night, after a dinner in Chattanooga, Haslam answered reporters' questions and repeated his concerns that the UAW would not have been good for Chattanooga. There, NewsChannel 5 Investigates asked if he had been less than forthcoming when he said that incentive were not tied to the UAW’s efforts.
Within the space of 30 seconds, Haslam both denied that the incentives were tied to any certain outcome and then said that they were. Here is that exchange:
A: It's no secret at all that we had an opinion about what should happen there and what the state's interests were.Q: But you never said that incentives were tied to...A: And they never have been. We have said that all the discussions were contingent upon discussions once all that was settled. We have a responsibility. This is taxpayer money that we are using to incentivize companies. We have a track record with companies who have been unionized and ones that weren't. Our track record is a lot better with ones those companies that weren't unionized.Q: But you never said that incentives were tied to any specific outcome.A: And we never have said. We have just said we are going to continue these discussions when that's over.Q: But that contract or that proposal said these incentives are contingent upon our satisfaction with the process.A: Right, and that's exactly right.Q: But you never admitted to that.A: Well, there's nothing to admit to. We've been really clear all along that we had an interest in the outcome of that vote. That's never been a secret to Volkswagen or anybody else. I think I've been really clear about that.
The next day, on April 2nd, Capitol Hill reporters again attempted to get an answer to the question of whether the $300 million offer hinged on whether the UAW won recognition.
Haslam still struggled to explain what point of “satisfaction” would have enabled the $300 million incentives to be approved.
A: The letter said this is contingent on satisfactory conclusion of talks around the works council. We never said it's going to be this number if you have a union and this number if you don't.Q: So what is satisfactory?A: We'll have to see, we'll have to see what the outcome is.Q: If UAW had won, would that have been satisfactory to the state?A: We've been really clear. I'll answer it this way, if UAW had won, it's not like we were going to discontinue discussions with them.Q: So why have that sentence in there at all?A: Because it mattered to us.Q: So it was an idle threat? Or it wasn't a threat?A: It wasn't a threat at all. It was just a statement of reality.
At that point, the governor voiced a new argument that had never appeared in any of the proposed statements prepared by his communications team -- namely, a concern that lawmakers might not approve the incentives if the UAW won.
“Any incentive deal that we do has to be approved in the legislature, OK?” Haslam said. “We had that discussion with them all along. That was going to be much, much more difficult if the union vote happened.”
(On the other hand, after the legislature adjourned for this year, the UAW announced that it was withdrawing its appeal of the vote and Haslam told reporters that "we look forward now for the chance to sit down with Volkswagen and have face-to-face conversation and see if we can get another vehicle to be built in Chattanooga." Haslam was less certain about whether legislative approval would be needed.)
Still, long gone was any claim that the $300 million offer was just contingent on the "process."
VW Offer: Expired Or Withdrawn?
As Volkswagen workers prepared to vote in February 2014, ECD Commissioner Bill Hagerty claimed that the state's incentives offer to Volkswagen had simply lapsed.
"Hagerty told The Associated Press this week that the state's 90-day incentives offer to VW for building the SUV here recently expired," the AP reported on Feb. 12.
After the UAW lost the vote, local website Nooga.com reported that Hagerty spokesman Clint Brewer "said Tuesday that the incentive package expired Jan. 31 and that the 90-day window is standard operating procedure."
Then, after NewsChannel 5 Investigates obtained the August 2013 offer, ECD officials were faced with the fact that there was no mention of a 90-day expiration in the VW offer and, more critically, the fact that it had been on the table well over 90 days.
So the explanation began to evolve.
"Due to the importance of the Volkswagen project, the state kept its incentive offer on the table for almost two months longer than the standard 90 days," the ECD statement read.
On April 2nd, two days after the story broke, Haslam implied to reporters that it had become a timing issue.
"Part of our concern was we had an offer out there for a lot longer than what is typical --and one of the things we were saying is we need an answer here,” the governor said. “We've got a developing budget situation. We have a legislature that needs to approve this. We need to drive this toward a conclusion."
Then, on April 24th, NewsChannel 5 Investigates published new emails that showed Hagerty had actually withdrawn the offer -- without any mention of a 90-day deadline.
"A number of circumstances have changed or occurred since we delivered the August 23rd materials," the commissioner said in an email to a top Volkswagen executive on Jan. 31st. "The August 2013 incentive summary does not account for these changes and is no longer relevant."
As we first reported, that email came just four days after Volkswagen signed a friendly agreement with the UAW, calling for a quick union election. And it came the same day that an anti-union group out of Washington was protesting Volkswagen not letting opponents inside the plant to voice their objections.
So were those the circumstances that, according to the commissioner, had changed?
On April 25th, Haslam voiced what appeared to be a new explanation – saying it was a question of money.
"First of all, the state’s revenue situation has changed, OK?” the governor told NewsChannel 5 Investigates. “As you know, we ended up having to change the state’s budget at that point in time, as well.”
Long gone was the claim that the offer had simply expired.
'We Haven't Heard Back'
"Number two,” Haslam said, “the circumstances have changed in that we haven't heard back from the company. That’s a very different circumstance.”
That was a theme that first emerged as the governor spoke to reporters on April 2nd.
“We finally said we need to talk with somebody who can speak finally for the company,” Haslam said. “I said we’re ready to have those conversations, and they said we’ll get back to you at the appropriate time – and that time hasn’t happened.”
But another email revealed that Volkswagen’s lawyer had actually presented a proposed agreement to the Haslam administration four days before Hagerty finally withdrew the incentives offer.
“We have drafted the document showing those economic incentives that VW had proposed several months ago, and which VW is prepared to present to its Board of Directors,” the lawyer wrote.
The attorney noted that the idea of Volkswagen submitting a proposed MOU had come out of “conversations directly between VW and Commissioner Hagerty’s office … in an effort to advance the deal with Tennessee.”
“We understand that there are some ‘non-deal’ issues that are causing a delay in the TN solution,” he wrote.
Back to NC5 Investigates: Tennessee's Secret Deals
NewsChannel 5 Investigates