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From SCDigest's On-Target E-Magazine

- Feb. 15, 2014 -

Breaking Supply Chain News: Volkswagen Plant in Chattanooga Votes Against UAW

Bitter Blow to the Union, as Volkswagen did not Even Contest the Move

SCDigest Editorial Staff

In the most watched union drive in years, in which the company itself seemed to support a unionization effort, workers at the three-year old Volkswagen factory in Chattanooga, TN narrowly voted against joining the United Autoworkers Union after voting ended yesterday, dealing the UAW a crushing blow, and certainly bringing doubts about efforts to unionize a Mercedes-Benz plant in Mississippi.

With the result, it means 100% of foreign automakers with plants in the US - most of them in the South and in right to work states - will remain without a union.

SCDigest Says:

With this bitter blow, the UAW will likely return attention to the Daimler plant in nearby Canton, which has been the subject of aggressive and non-traditional union techniques.

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The vote was 712 against and 626 for, and represented a stinging blow to the
UAW because Volkswagen did not even attempt to sway workers to vote No.

Since being built three years ago, the powerful IG Metall union has put pressure on Volkswagen management to unionize the plant in Tennessee, the only one of the company's more than 60 plants worldwide that is not unionized. As is common in Germany, two union executives sit on Volkswagen's board, and so called "work councils" of labor and local plant management personnel have a significant impact on decisions relative to each facility in the country.

IG Metall expressed concerns that German plants would lose work to the American non-union plant, and in the last year or so began more formally collaborating with the UAW in the US to organize the Chattanooga plant, as part of the massive effort the UAW is pursuing to unionize the transplant factories.

Helmut Lense, a former labor representative on Daimler's supervisory board, the equivalent of a US board of directors, said last November that "When there is even one plant with no union, the company can do whatever it wants," as Daimler is facing s similar issue for a Mercedes-Benz plant in Canton, Mississippi.

Auto workers in the non-union South earn about the same wages as do unionized employees at auto plants in the Midwest and Northeast, but don't bring along the same burdensome work rules that are a hallmark of union facilities. However, on average they earn about a third less in wages and benefits than do German union members. Energy prices are also soaring in Germany due to mandates and subsidies for renewables, whereas the US is enjoying a low cost energy boom.

Under pressure from its home union last fall, Volkswagen said it was willing to accept a majority vote by so-called "card check" procedures to recognize the UAW. The Wagner Act allows a union to be certified if a majority of workers sign authorization cards and an employer acquiesces, which Volkswagen was ready to do.

But the union effort failed when eight workers represented by the National Right to Work Legal Defense Foundation filed charges with the NLRB alleging that the UAW had lied to workers and bullied them into signing cards.

While the currently union-friendly NLRB dismissed the charges, enough workers were protesting the card-check vote that Volkswagen agreed to hold a secret-ballot election instead. However, Volkswagen signed a "neutrality agreement" that signaled it did not oppose a Yes vote.

Further, Volkswagen agreed to submit an "RM Petition," which employers rarely file and made up only 2.4% of the NLRB's docket last year, to speed up the process. That meant that within hours of the filing, Volkswagen, the UAW and the NLRB's regional field attorney and director had signed a "Stipulated Election Agreement" including the election dates, times and location.

An election was started last week just nine days later (the vote was taken over three days, ending Friday night). Over those nine days, Volkswagen gave the union free access to the factory floor, bulletin boards, a dedicated work room and tables in non-work areas to talk with workers.

(Manufacturing Article Continued Below)

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Yet despite all that, the union vote went the other way.

The New York Times spoke with VW line worker Mike Jarvis, who said the majority had voted against UAW because they were persuaded the union had hurt Detroit's automakers.

"Look at what happened to the auto manufacturers in Detroit and how they struggled. They all shared one huge factor: the UAW," Jarvis said.

Despite Volkswagen's official neutrality, that doesn't mean that there were not anti-union forces at work in the lead-up to the election.

Governor Bill Haslam, a Republican, warned that auto part suppliers would not locate in the Chattanooga area if the plant was unionized, while Senator Bob Corker said Volkswagen executives had told him that the plant would add a new production line, making SUVs, if the workers rejected the UAW. Corker also said in a series of series of interviews last week that a union victory would make Volkswagen less competitive and hurt workers' living standards.

Grover Norquist, normally associated with calls for lower taxes, helped get funds for a group that put up 13 billboards in Chattanooga, warning that the city could become the next Detroit if the union was approved.

Frank Fischer, chief executive and chairman of Volkswagen Chattanooga, quickly disputed Corker, saying that "There is no connection between our Chattanooga employees' decision about whether to be represented by a union and the decision about where to build a new product for the US market" - no doubt in part because the opposite could be construed as illegal anti-union intimidation.

With this bitter blow, the UAW will likely return attention to the Daimler plant in nearby Canton, which has been the subject of aggressive and non-traditional union techniques, from use of actor Danny Glover to planned to protest at Mercedes dealers this year in Brazil in the run-up to the World Cup soccer games this year. (See United Autoworkers Last Stand at Mississippi Nissan Factory an Inflection Point in Union Fate.)

But that effort suddenly was overshadowed when developments moved swiftly in Chattanooga, moving to the rapid and ultimately unsuccessful union vote.

Are you surprised by the VW vote? Where does the UAW go from here? Let us know your thoughts at the Feedback section below.

Recent Feedback

The only VW products I have ever owned were 1963 and 1969 models. I own Hyundai's now, both built right next door to GA in Alabama. I would consider a VW product now, except for hearing the complicity of VW management in this very detailed article. I do hope and pray for the TN VW worker's success. I was formerly at Nortel, and when in a unionized plant, as an Engineer I could not pick up a piece of equipment to move it to another bench! My wife worked at Western Electric, and only by getting a more technical job, did she escape the IBEW bullying and rules. Another non forced-unionism success is in WI with the 2/3 loss of teachers from their unions which cost them over $1000 in dues, which 80% goes to money laundering to the DNC/Democrat and liberal elections. I was glad to see Sen. Corker continue to stand up for NOT making things like Detroit. He got the best argument into a small sound bite. UAW: Stay OUT of MB and Hyundai USA plants! It is bad enough to have a bullies in the White House and Senate Leadership. Again, this is the most well written reporting and analysis I have seen on this very important news. Finally, when the NLRB illegally appointments are reversed by the Supreme Court, what else can improve? They almost succeeded in killing the Boeing plant in SC which Governor Nikki Hailey made too embarrassing for the President in 2010 elections.

Hilary Lamothe
Principal Engineer
ADVA Optical Networking
Feb, 16 2014