Workers at Volkswagen AG’s plant in Chattanooga, Tenn., handed the United Auto Workers union a well-earned defeat last week, based on the union’s dismal history of acrimony and confrontation, as well as its questionable value to workers.
Next will come the UAW’s response, a likely legal challenge to the vote. If the pro-union National Labor Relations Board entertains the union’s challenge, it could order a new election.
Just as important will be whether VW now puts its money where its mouth is – even without UAW representation – and gives its factory staff a “works council” with real power to decide substantive issues.
VW workers wondering whether to vote for the UAW in Chattanooga only had to review the record of the German automaker’s first U.S. plant. It was organized by the UAW and operated from 1979-85 in Westmoreland County, Pa.
That plant, which built the VW Rabbit, suffered from many difficulties -- mainly labor unrest. Six walkouts occurred in the first two years of operation. One sore point was the disparity between wages at Westmoreland and higher wages at UAW plants in Detroit – which sounds a lot like the unrest over two-tier UAW wages in Detroit.
The next piece of evidence for a voter in the plant would be the record of the nonunion southern transplants versus the record of General Motors, Ford Motor and Chrysler.
The transplants, without the UAW, are thriving: most have never laid off a worker. UAW-represented GM, by contrast, filed for bankruptcy in 2009. So did UAW-represented Chrysler. Ford Motor, fortunately, avoided Chapter 11, but has had to recover from massive losses during the recession.
This is not to suggest that the UAW, squeezing employers for above-market wages and rewarding them with occasional work stoppages, was solely responsible for the Detroit automakers' financial troubles. Poor management deserved a big part of the blame.
The relative labor tranquility of the past few years has a simple explanation. The U.S. government’s bailout of GM and Chrysler included agreement by the UAW to a no-strike pledge. That agreement expires next year.
In the Chattanooga region, VW’s wages and benefits are quite a bit higher than those paid by other manufacturers. That’s why tens of thousands applied for the jobs and many remain hopeful they can step into open positions as they occur.
Attractive Jobs in South
The same thing occurred when Toyota opened a plant in Georgetown, Ky., and when BMW opened one in Spartanburg, N.C. Transplant wages represented a premium, an opportunity for employees to improve their standard of living and that of their families.
From a worker’s perspective, a union shop at VW would mean paying dues to the UAW and the prospect of a shutdown the first time the employer and the union found themselves at odds. On the plus side, the UAW might be able to shake down VW for higher wages, richer benefits or an extra couple of vacation days. Is the risk of lost income due to strikes and the inevitable unrest that comes from adversarial labor relations worth a bump in compensation? A majority of workers evidently don't think so.
VW still could form a works council, without the UAW.
The process is tricky, because federal law passed in 1935 precludes the company from controlling the discussion or decisions that fall within the purview of the council. Thus, if VW gave a Chattanooga works council the authority to decide about wage and benefit increases, VW management would be obligated to accept the council’s decision without interference.
Transplant managements across the South are quietly cheering the UAW’s defeat in Chattanooga. But the game may be far from over. The UAW has options. The best would be to reform its tendency to confrontation and figure out how to play a more constructive role, one that might attract more voters.
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