In a statement released one hour before the scheduled start of a National Labor Relations Board hearing in Chattanooga, Tenn., UAW President Bob King said the union decided to abandon the challenge because it could have taken months or even years to come to a conclusion.
"The UAW is ready to put February's tainted election in the rearview mirror and instead focus on advocating for new jobs and economic investment in Chattanooga," King said.
The UAW had filed its appeal after Volkswagen workers rejected the union in a 712-626 vote in February, arguing that public statements from U.S. Sen. Bob Corker, Tennessee Gov. Bill Haslam and other GOP officials had raised fears about the plant's future if workers there organized.
Leaked documents later revealed that Tennessee had tied a $300 million incentive offer for expanding the plant to the satisfactory outcome of the labor situation there.
Volkswagen wants to introduce a German-style works council at the plant to represent both salaried and blue-collar workers, but the company's interpretation of U.S. law has been that it can't do so without the involvement of an independent union.
The company issued a statement Monday welcoming the UAW decision as "an important gesture for a constructive dialogue in Chattanooga." Volkswagen said it will continue to pursue its efforts to establish "a new, innovative form of co-determination in the USA."
Corker and Haslam oppose UAW expanding its reach in Tennessee, arguing that a win at Volkswagen would hurt the state's ability to attract other manufacturers and suppliers.
Corker, a former Chattanooga mayor, was particularly vocal during the three-day union vote in February, predicting the company would announce an expansion within two weeks of workers rejecting the union.
The senator later blamed the UAW appeal and the resulting delay in certifying the results of the union election for putting a hold on expansion talks at the plant.
"This 11th hour reversal by the UAW affirms what we have said all along that their objection was nothing more than a sideshow to draw attention away from their stinging loss in Chattanooga," Corker said in a statement.
"It's a shame the UAW slowed the momentum on our expansion conversations with Volkswagen, but now it's time for VW, our state and our community to re-engage and move forward with bringing additional jobs to Chattanooga," said Corker, who was traveling in Moldova.
UAW Regional Director Gary Casteel said the union's decision should now put the onus on the state to quickly approve the incentives.
"They have steadily used our objections to their behavior in the election as a scapegoat for the product not getting placed there, so we removed that element," Casteel said in a phone interview.
"Now they need to step up and do what's right for VW and those workers over there, get the incentives without any strings attached, and let VW concentrate on making cars and implementing their philosophy and culture that they use globally into that plant in Chattanooga," he said.
Corker and Haslam had filed motions fighting subpoenas from the union to produce documents and appear at the NLRB hearings.
The vote against the UAW was a setback to the union's goal of expanding into foreign-owned auto plants in the U.S., particularly those in the South.
The UAW says it will now focus on a congressional investigation announced last week by Democratic lawmakers into the anti-unionization campaign by Republican politicians and outside groups.