VW’s U.S. execs divided over UAW organizing drive, Sen. Corker says ‘A lot of dissension within the company’

VW’s U.S. execs divided over UAW organizing drive, Sen. Corker says
‘A lot of dissension within the company’

September 10, 2013 – 5:39 pm ET — UPDATED: 9/11/13 9:48 am ET – adds more details
DETROIT (Reuters) — U.S. executives at Volkswagen AG’s plant in Tennessee were “forced” by a German board member to sign a letter disclosing the UAW’s efforts to organize workers at the factory, a move that created tension within the company, U.S. Sen. Bob Corker said on Tuesday.
VW executives said last week in a letter to employees at the Chattanooga plant they are in talks with the UAW about the U.S. union’s bid to represent workers at the factory using an “innovative model,” which would be a milestone in the union’s long-running effort to organize foreign-owned auto plants.
Corker, R-Tenn., said the letter, signed by Frank Fischer, chief operating officer and manager of the plant, was driven by the board member in Germany and not the U.S. executives.
VW’s German board includes IG Metall union members who would like to see the UAW organize the Chattanooga plant and bring it in line with Volkswagen’s other major factories around the world that all have union representation.
“There was a lot of dissension within the company,” the Republican senator said in a telephone interview with Reuters. “I don’t think it, I know it. Candidly, one board member got very involved and forced this letter to go out.
“I know that it’s created tremendous amounts of tension within the company,” he said, adding that “many people thought that this was a dishonest letter.”
While it implied that U.S. executives and others at Volkswagen in Germany fully endorsed the UAW, he added, disagreement within the largest German automaker may put that support in doubt.
Taking issue
A Volkswagen spokesman at the Chattanooga plant, Guenther Scherelis, late Tuesday disputed Corker’s claims.
“The letter to the Chattanooga workforce was drafted, written and signed by Frank Fischer and Sebastian Patta to avoid further speculation from outside the company, without being forced by anyone,” Scherelis said.
Gary Casteel, the UAW’s regional director in the Southeast, who is based in Tennessee, called Corker’s views on how the UAW operates today as “spoken from a position of ignorance.”
Casteel said VW had become one of the world’s strongest automakers through its policy of co-determination, where labor has a voice at all its wholly owned plants except Chattanooga.
“It’s ludicrous to think that Chattanooga benefits from being the only outlier in this system,” Casteel said.
Casteel added the UAW was ready at any time to sit down and discuss the issues with Corker or Tennessee Gov. Bill Haslam, another opponent of the UAW.
Union cooperation
The UAW has been working with German union IG Metall, which represents VW’s workers in Germany.
Corker did not identify the board member, although Horst Neumann, who is also a member of IG Metall, said in March that the company was in talks with the UAW about setting up a German-style labor board in Chattanooga, where VW builds the Passat sedan.
In an interview Monday with Automotive News, Neumann said that company lawyers are now working on a proposal for such a “works council.” He said that as soon as the Detroit auto show, which starts Jan. 14, VW may have a proposal for organizing line workers that it will be able to discuss.
“As I’m learning, you can do a lot within the [American] legal framework,” Neumann said in an interview on the sidelines of a VW event on the eve of the Frankfurt Motor Show. “It’s an open country, the United States.”
Neumann would not comment on the details of a works council proposal or his meeting with UAW President Bob King two weeks ago, but he said he personally thinks a new way of representing workers could help the weakened organized labor movement in the United States.
The UAW has been no exception to that trend. It had 382,513 members at the end of 2012, down from 1.5 million in 1979, and has struggled to organize foreign-owned assembly plants.
‘Laughingstock’ in business world
A former mayor of Chattanooga, Corker said if VW didn’t pull back from allowing the UAW into the Tennessee plant, it risks becoming a “laughingstock in the business world” and causing a domino effect with other nonunion auto plants in the South.
However, the production chief for Mercedes said at the Frankfurt auto show on Tuesday that the German company had no need for a German-style works council at its plant near Tuscaloosa, Ala.
Corker, who was instrumental in VW’s selection of Chattanooga, called the UAW’s possible entry into the VW plant “a job-destroying idea” and said the idea of a more flexible, easier-to-work-with UAW was laughable.
“I’ve got to believe that the CEOs of the three U.S. companies are just rubbing their hands, hoping Volkswagen will carry out this self-inflicted wound,” he added, referring to General Motors, Ford Motor Co. and Fiat’s Chrysler Group, all of which have unionized workforces in their U.S. plants.
Casteel maintained that the German-style works council approach has never been tried in the United States.
VW has said that the 2,500 workers at the Chattanooga plant would ultimately decide the issue in a formal vote on whether to accept the UAW or any other trade union to represent them. No such vote has been set. Casteel said the UAW has the support of the majority of workers at the factory.
Organizing drives
King has been trying to organize foreign-owned, U.S.-based auto plants to bolster union membership that has shrunk since its peak in the late 1970s.
King met late last month in Germany with VW executives and officials from the company’s global works council, which represents VW blue- and white-collar employees around the world.
The union said that meeting “focused on the appropriate paths, consistent with American law, for arriving at both Volkswagen recognition of UAW representation at its Chattanooga facility and establishment of a German-style works council.”
Corker said VW officials have estimated what allowing the UAW into the Tennessee plant would cost the company, but declined to say what that figure was. He also said it would make Mexico more attractive to automakers versus the U.S. South.
However, Casteel said U.S. plants owned by the three domestic automakers with UAW-represented workers have boosted efficiency and gained production from Mexico.
Gabe Nelson of Automotive News contributed to this report.
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