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Union Suffers Big Loss at Tennessee VW Plant
Volkswagen workers rejected the UAW by a vote of 712 to 626.
Updated Feb. 15, 2014 11:49 a.m. ET
Frank Fischer, the chairman and CEO of the
Volkswagen plant in Tennessee, left, and Gary Casteel, a regional
director for the United Auto Workers, hold a press conference at the
Chattanooga, Tenn., facility on Feb. 14.
AP
The United Auto Workers union
suffered a crushing defeat Friday, falling short in an election in which
it seemed to have a clear path to organizing workers at
Volkswagen AG
VOW3.XE -0.49%
's plant in Chattanooga, Tenn.
The
setback is a bitter defeat because the union had the cooperation of
Volkswagen management and the aid of Germany's powerful IG Metall union,
yet it failed to win a majority among the plants 1,550 hourly workers.
Volkswagen workers rejected the union
by a vote of 712 to 626. The defeat raises questions about the future
of a union that for years has suffered from declining membership and
influence, and almost certainly leaves its president, Bob King, who had
vowed to organize at least one foreign auto maker by the time he retires
in June, with a tarnished legacy.
"If
the union can't win [in Chattanooga], it can't win anywhere," said Steve
Silvia, a economics and trade professor at American University who has
studied labor unions.
The UAW said that
"outside interference" affected the outcome of the vote.
"Unfortunately, politically motivated third parties threatened the
economic future of this facility and the opportunity for workers to
create a successful operating model that would grow jobs in Tennessee,"
Gary Casteel, the union official in charge of the VW campaign, said in a
statement.
Under an agreement the UAW
has with Volkswagen, it now must cease all organizing efforts aimed at
the Chattanooga plant for at least a year.
A
win would have marked the first time the union has been able to
organize a foreign-owned auto plant in a Southern U.S. state, and would
have been particularly meaningful, because the vote was set in a
right-to-work state in the South, where antiunion sentiment is strong
and all past UAW organizing drives at automobile plants have failed.
The
Chattanooga workers had been courted steadily for nearly two years by
both the UAW and the IG Metall union, which pushed Volkswagen management
to open talks with the UAW and to refrain from trying to dissuade
American workers from union representation.
Mr.
King made forging alliances with overseas unions the centerpiece of his
strategy after he was elected in 2010. The union now must come up with a
way to halt its decline. It once represented 1.5 million workers, but
now has about 400,000, and diminished influence, as a result of years of
downsizing, layoffs and cutbacks by the three Detroit auto makers
General Motors Co.,
Ford Motor Co.
F -0.91%
and Chrysler Group.
"The union needs new members. They have to organize the transplants or they don't have much of a future," said
Sean McAlinden,
chief economist at the Center for Automotive Research in Ann Arbor, Mich.
The
election was also extraordinary because Volkswagen chose to cooperate
closely with the UAW. Volkswagen allowed UAW organizers to campaign
inside the factory—a step rarely seen in this or other industries.
"This
is like an alternate universe where everything is turned upside down,"
said Cliff Hammond, a labor lawyer at Nemeth Law PC in Detroit, who
represents management clients but previously worked at the Service
Employees International Union. "Usually, companies fight" union drives,
he added.
The union's loss adds to a
long list of defeats for organized labor in recent years. States like
Wisconsin enacted laws that cut the power of public-employee unions, and
other states, including Michigan, home of the UAW, adopted
right-to-work laws that allow workers to opt out of union membership if
they choose.
The vote was held amid
public campaigning against the union by Republican politicians,
including Gov. Bill Haslam, and conservative activist groups.
Conservative political groups, including one backed by antitax activist
Grover Norquist, put up anti-union billboards around Chattanooga. A
small but determined group of workers who oppose the UAW also worked to
tilt their colleagues against the union, an effort that ultimately
proved successful.
"I'm thrilled for the employees and thrilled for the community," Tennessee Republican Sen.
Bob Corker
said in a telephone interview, adding that he's "sincerely overwhelmed" by the result.
The
UAW had appeared to have strong chances in the election because both
Volkswagen and the IG Metall union wanted the Chattanooga plant to have a
works council, a formal committee of both union and nonunion employees
who negotiate with management on day-to-day working matters at the
plant.
Works councils are standard in
German workplaces—almost all other Volkswagen facilities around the
world have one. In the U.S., however, it appears to many labor-law
experts that they can only be implemented legally if workers are
represented by an outside union.
Since
both Volkswagen and IG Metall have expressed a strong desire to have a
works council in Chattanooga, the auto maker chose to work with the UAW.
In addition to letting union representatives into the plant, Volkswagen
kept members of management from expressing any views on the vote, and
agreed to coordinate its public statements with the union during the
election campaign.
"This vote was essentially gift-wrapped for the union by Volkswagen," Mr. Hammond, the labor lawyer, said.
The chief executive of the plant,
Frank Fischer,
said in a statement that Volkswagen will continue to search for a method of establishing a works council.
The
works council concept also proved a winner for some Chattanooga
workers. Jonathan Walden, 39 years old, earns about $19.50 an hour—about
$4 an hour more than starting workers at GM, Ford and Chrysler—but he
voted for the union because he wants a works council. "I don't know why
more companies don't do this," said Mr. Walden, who works in the paint
shop.
But more workers were persuaded to
vote against the union by the UAW's past of bitter battles with
management, costly labor contracts and complex work rules. "If the union
comes in, we'll have a divided work force," said Cheryl Hawkins, 44, an
assembly line worker with three sons. "It will ruin what we have."
Other
UAW opponents said they dislike the union's support of politicians who
back causes like abortion rights and gun control that rub against the
conservative bent of Southern states like Tennessee. Still others
objected to paying dues to a union from Detroit that is aligned with
Volkswagen competitors like GM and Ford.
"I
just don't trust them," said Danielle Brunner, 23, who has worked at
the plant for nearly three years and makes about $20 an hour—about $5 an
hour more than new hires at GM, Ford and Chrysler plants.
The
no-UAW vote raises questions on how the union proceeds now in separate
efforts to organize other foreign-owned plants in the South, and whether
international cooperation can provide any additional leverage for labor
unions.
The UAW's alliance with IG
Metall was forged over the last several years by Mr. King, who traveled
to Germany, Japan, Brazil and South Korea in hopes of getting unions
around the world to combine forces.
For
the last two years the union has also been working to build support at a
Mercedes-Benz plant in Vance, Ala., and at a Nissan Motor Co. plant in
Canton, Miss. Its chances there now seem diminished, in view of how
those companies are less willing to cooperate with the UAW than
Volkswagen.
At Mercedes, workers who
want UAW representation recently filed complaints to the National Labor
Relations Board alleging they have been harassed by management because
of their efforts to build union support. Daimler AG, the parent of
Mercedes-Benz, has denied the charges.
The
UAW's loss in Chattanooga also seems likely to complicate contract
talks it will have with the Detroit auto makers in 2015. Right now, GM,
Ford and Chrysler pay veteran workers about $28 an hour, and new hires
about $15 an hour, and the UAW wants to narrow that gap.
But
without the ability to push wages higher at foreign-owned car plants,
the UAW is likely to have little leverage in Detroit, said Kristin
Dziczek, director of the Labor & Industry Group at the Center for
Automotive Research in Ann Arbor, Mich.
"They
have to organize at least one of the international auto makers in order
to attempt to regain bargaining power with the Detroit Three," she
added.
Write to Neal E. Boudette at neal.boudette@wsj.com
Kevin McCaffrey
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