Volkswagen AG's U.S. division said Wednesday it has agreed to steps that could allow for union representation at its plant in Chattanooga, Tennessee, where the United Auto Workers has unsuccessfully tried to organize workers.

The UAW lost a key membership vote 712-to-626 in February at VW's only U.S. plant but the union claims it now has the backing of a majority of employees.

Under the new policy, the company opens the door to dialogue with labor organizations that can prove they represent a certain number of workers at the plant.

The UAW said Wednesday it wants VW to live up to commitments to recognize the union as representing workers in the plant. If the union succeeds, it will be the first foreign-owned auto assembly plant in the U.S. South where employees have bargaining rights.

The Chattanooga plant is the only major factory in VW's global network of over 100 facilities that lacks representation on the global works council.

"We recognize and accept that many of our employees are interested in external representation and we are putting this policy in place," said Sebastian Patta, a VW executive in Chattanooga.

The policy lays out a three-tiered system to guide interactions with management based on the size of the organization.

If a union represents 15 percent of the plant's employees, it can bring grievances to VW human resources representatives once a month.

A union with more members - more than 30 percent or 45 percent support - can meet more frequently with VW officials and the company's executive committee.

An outside auditor will review the union rosters to verify the membership requirements.

"We have questions about this policy, which we'll work through in discussions with management," said Gary Casteel, secretary-treasurer of the UAW.

The union hopes success in Chattanooga will convince workers at other non-union plants to join, for instance a Daimler AG Mercedes factory in Alabama.

"We assume that the company will soon examine the number of members of (the UAW's Chattanooga branch) Local 42 and then start the cooperation with UAW," said Frank Patta, general secretary of VW's global works council, a German-style committee that includes blue-collar and white-collar members from the company's plants worldwide.

Patrick Semmens, an executive at The National Right to Work Foundation, which opposes the union, accused VW of being "determined to prop up the UAW" and "cutting backroom deals."

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