CHATTANOOGA, Tenn. — A new labour policy at Volkswagens Tennessee factory is encouraging both supporters and opponents of a major labour unio to unioize its first foreign auto plant in the U.S. South.

Volkswagen Chattanooga Plant

The new policy, known as Community Organization Engagement, establishes formal rules for labour groups at the plant for the first time. What the effects will be is still up for debate.

To some, the policy may open the door to the United Auto Workers eventually representing all workers in contract negotiations. To others, it may undercut the unio by giving an opposing group an official voice at the plant.

The outcome is being closely watched in the U.S. and abroad. Other German and Asian automakers in the South are keenly monitoring developments, as are anti-unio Republicans.

And the company, with perhaps the most to say, isnt saying much at all.

Lets let this play out and see how it goes, said Volkswagen Chattanooga spokesman Scott Wilson.

The policy works like this: Groups that can sign up at least 15 per cent of workers get access to plant meeting space and regular meetings with management. Groups that sign up to 30 per cent or 45 per cent of employees get more access.

While the guidelines explicitly steer clear of questions of collective bargaining, the UAW sees it as an opportunity to begin erasing its narrow defeat in a unio vote at the plant in February.

Its just one step toward recognition, UAW Local 42 President Mike Cantrell said in an interview in the unios bustling Chattanooga office.

The cramped, one-room office about 5 miles (8 kilometres) from the Volkswagen plant was overflowing with caps, T-shirts and other organizing materials. The UAW shares the space with the International Brotherhood of Electrical Workers.

A rival group called the American Council of Employees recently set up shop nearby in a spacious two-story building that previously housed a youth church group. There are sofas, a pool table and a separate meeting room with a stage.

Interim President Sean Moss said the group is recruiting workers to present an alternate voice for hourly and salaried employees. He said its core membership is made up of the same workers who spearheaded the opposition to the UAW in February.

To me it does not make any sense to line up with the people who are going down, and going down fast, said Moss, who declined to elaborate on how his group is funded.

The internal politics of the Volkswagen board, half of which is made up of worker representatives, have played heavily the unio issues at the plant.

Following the labour policy, the UAWs German counterpart, IG metall, called on Volkswagen to show its true colours and officially recognize the UAW once it has signed up a majority of workers. Detlef Wetzel, the German unios president, also demanded that Volkswagen refuse to deal with what he called yellow unios — organizations more focused on representing company interests than those of the workers.

Moss said he wasnt worried by the alliance between the UAW and IG metall.

IG metall and the UAW said they want people to organize and to stand up and have a voice, but only if its under them, he said.

Volkswagen management has been under heavy pressure from unio representatives on its board because the U.S. plant stands alone among the automakers worldwide facilities without formal labour representation.

The same law requiring labour representation on the Volkswagen board also applies to other German automakers with factories in the South, like BMW and Mercedes parent Daimler. The UAW has so far failed to make inroads at those companies plants in Alabama and South Carolina, and Republican officials there have been keen to keep it that way.

Volkswagen has voiced support for creating a German-style works council at the Tennessee plant to represent salaried and hourly workers. Under that model, wages are bargained through the unio, while the works council negotiates matters like job security and working conditions.

The UAW, which claims to have signed up more than half of the eligible workers at the plant, is hoping the company will recognize the unio without another contentious ratification vote. The local unio has submitted a list of its members to Volkswagen to qualify under the new policy, and the vetting process is underway.