Can labor unions return to the South? Volkswagen wants to bring its works council to its plant in Tennessee, but Republicans are opposed. A key vote wraps up Friday.
Can labor unions return to the South?
Volkswagen wants to bring its works council to its plant in Tennessee, but Republicans are opposed. A key vote wraps up Friday.
By Darrell Delamaide, MarketWatch
WASHINGTON — Can a German company lead a revolution in the United States?
Volkswagen (VLKAY +1.06%) is breaking new ground in the famously anti-union South with its plan to bring the works council it has in most of its other factories to the assembly plant in Chattanooga, Tenn.
Workers at the plant — which currently produces the VW Passat but is vying to get the midsized SUV the German auto maker is planning for the U.S. market — are voting this week on accepting union representation from the United Auto Workers.
The vote is being held through Friday and the measure faces virulent opposition from Republican lawmakers and outside forces such as Grover Norquist’s anti-tax coalition, but union officials are optimistic after a majority of workers signed cards in favor of the union.
Unionization is the necessary precondition under U.S. labor law for VW to bring the works council concept — which gives workers a voice in decisions regarding the plant — to its U.S. factory. Though it remains officially neutral regarding union affiliation, the company has made it clear it wants the works council.
Worker participation, from the co-determination of worker representatives on the board of directors to works councils at individual factories, is an important factor in Germany’s enduring success as an exporter.
It was cooperation from unions that enabled Germany to implement painful labor-market reforms under former Chancellor Gerhard Schroeder in the early 2000s — reforms that restored German competitiveness and are now touted as the model for the rest of Europe.
The plan to bring this enlightened form of worker-management cooperation to the South has drawn the ire of Republican politicians, from U.S. Sen. Bob Corker — a former mayor of Chattanooga — to the speaker pro tem of the state Senate, Bo Watson, who finds the whole undertaking somehow "un-American."
Foreign auto makers, so these politicians claim, have located factories in the South precisely because they can avoid unions and pay workers less.
They worry that if the VW workers do in fact vote in favor of the union, it will have a domino effect on other assembly plants and auto suppliers in the region, discouraging further investment.
Union representatives counter that this is obsolete thinking. The UAW has played an important role in the resurgence of Detroit auto makers — including in a (unionized) General Motors (GM +2.13%) factory in Spring Hill, Tenn.
Watson threatened that a vote in favor of the union would mean Tennessee may deny tax incentives to any further VW investment in the state, while Corker cited unnamed sources at VW who assured him that a negative vote would guarantee the new SUV line coming to the state.
The head of the VW unit, Frank Fischer, quickly contradicted Corker, reaffirming the company’s previous statements that the vote would not affect the car maker’s decision about the SUV production, regardless of the outcome.
As for Watson’s threat, the current mayor of Chattanooga, Andy Berke, expressed consternation that politics could lead state lawmakers to undermine efforts to bring new investment and jobs to the state. He called the attacks against Volkswagen "reckless" and "unprecedented."
The strength of unions in Germany comes after decades of sometimes-bitter struggle due to strong leadership at the unions and political clout through the Social Democratic Party.
German managers may grouse at the restrictions put on them by unions, but they have come to see the merits of keeping a skilled workforce happy and the ability to co-opt labor into difficult downsizing or restructuring decisions.
This German sensibility has been honed by the country’s dependence on exports in the absence of large domestic market like that in the U.S.
It is about as far removed from the anti-union, anti-labor South as the 1983 version of "Chattanooga Choo Choo" by German pop singer Udo Lindenberg is from the 1941 original.
In the German version, "Special Train to Pankow," the harmless ditty becomes a political tract expressing Lindenberg’s desire to bring Western pop music to East Germany (Pankow is a neighborhood in the former East Berlin).
The UAW is happy to have an ally as potent as VW as it tries to engineer a turnaround in union fortunes in this country. Membership in the UAW today at 383,000 members is only one-fourth of the 1979 peak of 1.5 million.
Opponents of the union efforts in Chattanooga may well be right — a vote in favor of the union there could mark a turning point for the whole country.