Volkswagen's Chattanooga employees have spurned the United Auto Workers, rejecting two years of wooing by the Detroit-based union in a vote of 712 to 626.
The vote count came late Friday after three days of balloting by VW workers in the National Labor Relations Board-supervised election. Some experts said the result is a blow to the UAW and that the VW plant was its best chance to organize a foreign-owned auto factory in the South.
Jack Nerad, executive market analyst of Kelley Blue Book, said UAW put a lot of work into trying to organize VW's Chattanooga operation. He termed it "a publicity setback for certain."
"On behalf of Volkswagen Group of America, I want to thank all of our Chattanooga production and maintenance employees for their participation in this week's vote. They have spoken, and Volkswagen will respect the decision of the majority," said Frank Fischer, CEO and chairman of Volkswagen Chattanooga. "The election results remain to be certified by the NLRB," Fischer, said.
"Our employees have not made a decision that they are against a works council. Throughout this process, we found great enthusiasm for the idea of an American-style works council both inside and outside our plant," Fischer noted. "Our goal continues to be to determine the best method for establishing a works council in accordance with the requirements of U.S. labor law to meet VW America's production needs and serve our employees' interests. ''
Sebastian Patta, vice president for human resources, said, "While there was intense outside interest in this election, our managers and employees inside the plant maintained high quality production and continued to work together in a calm and respectful manner."
"Our commitment to Tennessee is a long-term investment. We look forward to continuing to work with the state of Tennessee and the city of Chattanooga to support job creation, growth, and economic development today and into the future," Fischer added.
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Times Opinion: Sorting out the pieces in a union vote everybody lost
“It’s unfortunate there were some outside influences.”
That was the statement of United Auto Workers regional director Gary Casteel on Friday night after learning that Volkswagen Chattanooga workers rejected the union by a vote of 712-626. “I urge VW employees to go back to building cars,” Casteel said. “There are some issues still to be sorted out about this election.”
That’s resoundingly true. And not least among those issues is whether Tennessee Republican politicians — especially U.S. Sen. Bob Corker — abused their power by threatening plant incentives and stating that they had inside information that if workers rejected the union, then VW would get a second vehicle assembly line to build the company’s new crossover sport utility vehicle here.
“What [Tennessee’s U.S. Sen. Bob] Corker did, guaranteeing that SUV, probably affected it,” a union official reportedly said after the vote. “By promising it, he took it away from them.”
Let’s hope not. But there was, and frankly still is, that much and more at stake: The future of unionization, more Chattanooga jobs, a company that still doesn’t have what it calls a “works council,” political pride and the potential for new labor campaign donations in a very “red” state. And now perhaps also hanging in the balance might be an National Labor Relations Board investigation and legal challenge.
“We going to sit down with our legal department and make a collective decision on our next steps,” UAW president Bob King said on Friday night. “The threats against the company and the threats against the workers shifted things. … We’re looking at all of our legal options.” King called the actions of state politicians “outrageous.”
The vote represented a new kind of labor union with a great potential to spread. VW wanted to follow in Chattanooga the business model that has worked well at its 61 other plants worldwide. VW calls that model a “philosophy of co-determination,” and it uses a works council made up of blue-collar and white-collar workers collaborating with management to make decisions at the plant.
It seems to be a common-sense and refreshing concept in today’s top-down, re-Guilded Age America when 1 percent of Americans are reaping the lion’s share of the country’s income gains and when Fortune 500 CEOs make 204 times what regular workers average. What’s more, this works council, U.S. style, had potential to be far more more palatable to both workers and businesses, especially Southern businesses.
But to be U.S.-legal, the model needed a union connection, so UAW stepped up, and Volkswagen invited workers and the union to make a decision about their own collaboration while the company would be “neutral.”
That’s when the GOP and notoriously conservative chambers of commerce got nervous. Their manufacturing recruitment calling cards for decades have been “no unions.” And, of course, without unions the GOP-heavy state lawmakers haven’t had much to worry about in the way of labor donations for Democrat opponents.
At the same time, VW and local officials are negotiating ways to make Chattanooga more attractive than Mexico for the new SUV line. That means they’ve been talking about what local incentives (some call it corporate welfare) state and local officials would throw in to sweeten the deal. With all that pressure, Republican solons — the same ones who pride themselves and market their party as being against “big government” — began to act very much like “big government.”
Gov. Bill Haslam and Tennessee’s U.S. Sen. Bob Corker and others said the economic development sky would fall on Tennessee if VW accepted UAW.
As VW workers prepared for a three-day secret ballot vote, Tennessee Senate Speaker Pro Tempore Bo Watson, a Chattanooga Republican who represents Hixson, threatened future economic incentive deals with Volkswagen if employees agree to allow unionization. Such an expansion would be necessary for the SUV line — something Chattanooga has been hotly competing with Mexico to land.
“Should the workers at Volkswagen choose to be represented by the United Auto Workers, then I believe any additional incentives from the citizens of the state of Tennessee for expansion or otherwise will have a very tough time passing the Tennessee Senate,” Watson said. And he called Volkswagen’s UAW/works council effort “un-American.”
Then Corker, who had said he would stay silent once the vote was scheduled, reversed himself and roared into Chattanooga in the midst of the vote and said that VW officials told him if the workers reject the UAW, the plant will become of the site a second vehicle for assembly. The unspoken innuendo, of course, was that VW Chattanooga would not be awarded then new SUV assembly line if the union was accepted.
“I’ve had conversations today and based on those am assured that should the workers vote against the UAW, Volkswagen will announce in the coming weeks that it will manufacture its new mid-size SUV here in Chattanooga,” Corker said.
Who, Senator? VW has stated repeatedly this is not true.
Threats and innuendos — all the machinations of politicians trying to use the power of the state to thwart a union election and coerce a vote the way they want to see it go.
Fellows, you’ve done Boss Hog proud.
Free Press Opinion: After VW vote it’s time for officials to step up
Where were we, Volkswagen of Chattanooga employees may be asking, before we were so rudely interrupted?
Workers at the VW assembly plant turned down the United Auto Workers bid to represent them in voting that concluded Friday night, ending a two-year courtship but a whirlwind last several weeks in which charges were leveled that outside anti-union forces influenced the vote.
The irony was the union itself was likely seen as the biggest outsider of all, a playground bully come to have its way with employees who already are paid better than many other autoworkers, who have repeatedly talked about what a fine company they work for and who work at what is considered the most modern, environmentally friendly automobile plant in the world.
“We felt like we were already being treated very well by Volkswagen in terms of pay and benefits and bonuses,” said Sean Moss, who voted against the UAW in its 712-626 loss. “We also looked at the track record of the UAW. Why buy a ticket on the Titanic?”
While union supporters decried comments by U.S. Bob Corker, R-Tennessee, Gov. Bill Haslam and organizations such as Grover Norquist’s Americans for Tax Reform as interfering, others saw the union as a heavy favorite since Volkswagen had agreed to remain neutral in the election but allowed the union access to its workers.
“This is like an alternate universe where everything is turned upside down,” Cliff Hammond, a labor lawyer at Nemeth Law PC in Detroit, who represents management clients but previously worked at the Service Employees International Union, told the Wall Street Journal. “Usually, companies fight” union drives. “This vote was essentially gift-wrapped for the union by Volkswagen.”
Mark Mix, president of the National Right to Work Foundation, which opposed the organizing bid, told Automotive News the union and Volkswagen’s German management “colluded for over two years to stack the deck against the workers” and allow a rapid-fire unionization election in the plant.
“If UAW union officials cannot win when the odds are so stacked in their favor,” he said in a statement, “perhaps they should reevaluate the product they are selling to workers.”
Even the biggest union booster of all, President Barack Obama, got involved Friday, though his remarks made little sense to those who understood the stakes.
He accused Republican politicians of being more concerned about, of all things, German shareholders than U.S. workers.
So it was the union’s game to lose.
“If this was going to work anywhere,” Kristin Dziczek, a labor specialist at the Center for Automotive Research told the Washington Post, “this is where it was going to work.”
Corker, who worked to bring the plant to Chattanooga and has remained in close contact with management for the company since, had remained mum about the election until he said pro-union factions seemed to imply his silence meant consent in what they were doing. So he made his intent clear he opposed the UAW.
“Needless to say, I am thrilled for the employees at Volkswagen and for our community and its future,” he said in a brief statement Friday night. “The UAW had all the advantages,” he told a newspaper. “Everybody but the UAW had both hands tied behind their backs. I’m just thankful the employees made the decision they made.”
It’s been suggested, even by UAW President Bob King, that the South is the last, best hope for the union, which has lost 75 percent of its membership since 1979 and now has less than 400,000 members. So while King and others aren’t ready to throw in the towel, its prospects didn’t improve with the vote.
“If the union can’t win [in Chattanooga], it can’t win anywhere,” Steve Silvia, a economics and trade professor at American University who has studied labor unions, told the Wall Street Journal.
Insiders said the UAW’s lack of progress in the South, where foreign automakers have 14 assembly plants, eight built in the past decade, but where it has been rebuffed at Daimler, Nissan and Honda plants, won’t help when it is negotiating for workers at Ford, GM and Chrysler in 2015.
“They have to organize at least one of the international automakers in order to attempt to regain bargaining power with the Detroit Three,” Dziczek told the Wall Street Journal.
“The balance of power in setting wages and benefits has shifted to the non-union sector,” she said to the Washington Post. “If they are bargaining for more of the work force, they can make more of an even playing field for labor costs.”
King had traveled to Germany, where he forged an alliance with German union IG Metall, and to Japan, Brazil and South Korea in hopes of getting unions around the world to combine forces, so Friday night’s vote was a bitter blow.
The threats against the company and the threats against the workers shifted things, he said, not ruling out a challenge to the vote.
“I think it’s a temporary setback,” King said. It’s a setback, but we don’t quit because of setbacks. We never have, we never will. We know what’s right. We’re going to fight for what’s right. We believe the workers here will ultimately prevail.”
However, under an agreement the UAW has with Volkswagen, the union now must cease all organizing efforts aimed at the Chattanooga plant for at least a year.
But it may not be the last time a union is voted on at the plant. Even Corker suggested as much earlier this week, stating he wouldn’t have any problem with VW employees creating their own union.
Volkswagen, by law, would need a union to properly set up a type of works council it has sought for the Chattanooga plant that replicates ones at its other international sites (except those in China).
Frank Fischer, chief executive officer and president of Volkswagen Chattanooga, placed his hopes in a works council after the vote.
“Our employees have not made a decision that they are against a works council,” he said. “Throughout this process, we found great enthusiasm for the idea of an American-style works council both inside and outside our plant. Our goal continues to be to determine the best method for establishing a works council in accordance with the requirements of U.S. labor law to meet VW America’s production needs and serve our employees’ interests.”
With a union victory, the UAW would have negotiated wages and benefits for plant workers, with overtime rules, quality initiatives, health and safety guidelines, and other daily operations being handled by a works council.
While the 53.2 percent of “no” votes to the union was decisive, having been counted by National Labor Relations Board officials in front of representatives of pro- and anti-union forces, the results will not be final until they are certified.
Looking forward, while Chattanooga and Tennessee elected officials — hardly outsiders — had their say this week, they also implied the results of the voting would make a difference as to whether the Chattanooga plant would be the one to produce VW’s new seven-passenger crossover vehicle, the CrossBlue (due in 2016); whether the state would offer further incentives to VW; and whether suppliers would locate close to the area.
So, Republican politicians, that’s on you. Let’s hope we can count on you to use the same influence to help these things happen for Chattanooga as you did to help turn back the UAW.