Motoramic

UAW gambles on organizing Volkswagen’s Tennessee plant

Justin Hyde
Motoramic

Volkswagen's factory in Chattanooga, Tenn., has been a success by any measure since its opening in 2011, building more than 250,000 Passat sedans and employing some 2,000 workers. Yet it's now the center of a controversy over its future — namely, whether VW will invite the United Auto Workers to unionize the factory, a first for a foreign automaker's plant in the South.

Today, the UAW confirmed it had been in talks with VW about organizing workers or setting up a German-style worker council at Chattanooga. The possibility has already drawn criticism from Tennessee Gov. Bill Haslam and other Southern Republicans, who warn that any UAW organizing could deter businesses from locating in their states. But even if the UAW garners an invite to Chattanooga, it's no guarantee of a warm welcome from the workers themselves — and it's not a battle the UAW can afford to lose.

"The UAW believes the role of the union in the 21st century is to create an environment where both the company and workers succeed," the union said in a statement Friday. "The UAW appreciates the opportunity to have direct discussions with VW management. Ultimately, however, it's the workers in Chattanooga who will make the decision on representation and a works council."

While the UAW still holds sway at U.S. automakers' plants, it has never won the right to represent workers at a foreign automakers' plant where it wasn't invited in — with one exception: VW's first American factory in Pennsylvania, which closed in 1988. The union lost an organizing vote at Nissan's Smyrna, Tenn., plant in 2001, failing to collect 30% of the ballots cast, and while it has targeted other factories owned by Toyota, Honda, Nissan and Mercedes, it's not pushed for an organizing vote at an automaker's plant since.

That lack of union activity has been a selling point for Southern states as they've won billions of dollars in investments from global automakers, who now run 16 U.S. assembly plants. Where families in Michigan have generations of union members, there's no such tradition in many Southern states, and even at starting wages of $14-$17 per hour — less than a typical Detroit factory worker made a decade ago — such factories often draw thousands of applicants for open jobs, and offer better benefits than most other employers in their states. And booming auto sales have translated into plenty of work at U.S. factories; according to the August employment figures released Friday, automakers and suppliers added 18,800 jobs last month in an otherwise weak market for new work.

The rise of foreign automakers and decades of shrinking American manufacturing has left the UAW with a fraction of the membership it once held — 382,513 as of last year, compared to 1.5 million in 1979. The bankruptcies of General Motors and Chrysler also curtailed its bargaining powers, with the UAW barred from striking either automaker until 2015.

But the union's road to Volkswagen's Tennessee factory starts in Germany. Under German law, half of VW's 20 supervisory board members, similar to a U.S. corporation's board of directors, are employees elected by German unions. Those officials have been pressing management to invite the UAW into the Chattanooga plant, the only VW assembly plant in the world not represented by a union — a growing concern for them since VW has considered doubling the Chattanooga plant to build SUVs.

VW hasn't agreed to any role for the UAW at the factory yet, and told workers in a letter obtained by the Associated Press this week that the company was considering "the possibility of implementing an innovative model of employee representation for all employees." While the UAW could set up a traditional union local, VW might only agree to a German-style works council — a committee of employee representatives that has far less sway.

And whatever accord VW reaches with the UAW will have to pass muster with the workers in Chattanooga themselves, VW's managers told Chattanooga workers that they recognized the talks had sparked a "very lively discussion," adding: "Every single team member takes his or her own decision and this will be respected by us."

If the UAW succeeds, other German automakers such as Mercedes and BMW could face similar pressure from their German-based union. But if its Chattanooga efforts end without a deal, the UAW will not have lost just VW, but its best chance at proving it can organize workers in the 21st century as well as it did in the 20th.

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