Volkswagen's top labour representative has threatened to try to block further investments in the southern United States if the Chattanooga workers are not unionised, media reports said.

Workers at the Tennessee Passat factory voted against representation by the United Auto Workers union (UAW), rejecting efforts by VW representatives to set up a German-style works council at the plant.

Chattanooga is VW's only factory in the US and one of the company's few in the world without a works council.

"I can imagine fairly well that another VW factory in the United States, provided that one more should still be set up there, does not necessarily have to be assigned to the south again," Reuters quoted Bernd Osterloh, head of VW's works council, as telling German newspaper Sueddeutsche Zeitung.

"If co-determination isn't guaranteed in the first place, we as workers will hardly be able to vote in favour" of potentially building another plant in the US south, Osterloh, who is also on VW's supervisory board, said.

The 20-member panel - evenly split between labour and management - has to approve any decision on closing plants or building new ones.

"The conservatives stirred up massive, anti-union sentiments," Osterloh said. "It's possible that the conclusion will be drawn that this interference amounted to unfair labour [practice]."

Republican senator Bob Corker, a staunch opponent of unionisation, said after the first day of voting that VW would award the factory another model if the UAW was rejected.

The comments even prompted president Barack Obama to intervene, accusing Republicans of trying to block the Chattanooga workforce's efforts.

Undeterred by the 'no' vote, VW's works council has said it will press on with efforts to set up labour representation at Chattanooga which builds the US market version of the Passat sedan.

Local commentators have suggested the powerful German works council, with its seat on the supervisory board could also influence the decision on an additional model, sending it to Mexico instead of Tennessee.

VW is expected to build a new SUV based on the CrossBlue concept specifically for North America at a plant in the NAFTA region to keep the price competitive with locally built rivals.

COMMENT: US splits north/south on union issue?