A Nail in the Coffin for Organized Labor? Union Hit With Big Loss at Tennessee VW Plant

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A worker walks under cars on the assembly line at a Volkswagen factory on March 7, 2012. The Chattanooga plant is one of the only Volkswagen facilities in the world without a union.
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In Tennessee, a vote was held over the weekend that many believe could be a nail in the coffin for organized labor.

Workers at Volkswagen’s Chattanooga plant voted against joining the United Auto Workers (UAW) union—Tennessee is a right to work state, and this move was opposed every step of the way by the state's U.S. Senator, Bob Corker, and other members of the GOP.

Since the push to unionize the workers failed, it has raised questions as to whether organized labor can turn the tide and arrest the decline in membership.

Kristin Dziczek is director of the Industry & Labor Group at the Center for Automotive Research. She joins The Takeaway to describe why this vote caused such a fight and what the business impact might be. Andy Berke, the mayor of Chattanooga, also weighs in.

Dziczek says that she believes the drive to have a works council in Tennessee is still fairly strong, and that the desire to organize other automotive manufacturing plants and suppliers will continue for the UAW.

"It's an absolute survival issue for them," she says. "It's not about members and dues, it's about regaining control of setting wages and benefits for this industry."

In a sense, this union vote was unusual due to the large amount of outside money being funneled in from parties like Grover Norquist and the Koch brothers. Does this vote signal a fundamental shift in the way union matters will be handled?

"It was abnormal in a lot of ways," says Dziczek. "This was a very different situation where the company itself wasn't fighting unionization, but outside third party interests were. It makes me wonder, what is in it for them? What is their stake in this election that is between the workers, their company and the UAW that seeks to represent them?"

Mayor Berke agrees that what happened at the Chattanooga plant was unusual. 

"For us, we see Volkswagen as a valued employer in Chattanooga," he says. "To see this really amazing political situation play out over the last few weeks, where you had outside groups and lots of politicians talking about this really important Chattanooga employer, it was kind of a bizarre situation."

They mayor adds that the works council is vital to the function of Volkswagen—the company has 102 plants worldwide, and all of them except for the Chattanooga factory and two plants in China have such a council, an expression of the company's belief in what it calls "co-determination."

"(Volkswagen) is really dedicated to this works council concept," says the mayor. "They think that having workers and management together builds better cars. They've got 550,000 employees, they've got more than 100 plants around the world—they seem to know what they're doing. I look to them to continue to work on this works council project."

As the law stands right now, a works council cannot exist without the union. Volkswagen executives are on their way to Chattanooga in hopes that they may be able to negotiate the implementation the council without the union. Whether or not that is possible remains to be seen.

"I think they're going to look at alternatives," says Mayor Berke. "The UAW was certainly one way to do it—they're going to continue to look at other ways to do it. They believe they build better cars and that it's a competitive advantage for them. I've been in the meetings with executives from Wolfsburg who have looked me in the eye and said, 'This is a competitive advantage for us.' If they think that that helps them build better cars at a cheaper price, I think they're going to continue to look for ways to make it happen."