unions

VW may offer UAW some hope in the South

February 5, 2014: 2:54 PM ET

Workers at Volkswagen's new U.S. assembly plant in Chattanooga will vote in a secret ballot whether to join the UAW, which may open the door to unions at other Southern auto plants.

By Doron Levin

An auto worker at Volkswagen's plant in Chatanooga, Tenn.

An auto worker at Volkswagen's plant in Chattanooga, Tenn.

FORTUNE -- The once-mighty United Auto Workers union, with less clout today than at any time in its history, may finally have found a foreign automaker whose workers it can organize.

Workers at Volkswagen's new U.S. assembly plant in Chattanooga, Tenn. will vote in a secret ballot from Feb. 12 to Feb. 14 whether to join the UAW. Some VW executives privately are saying the UAW might win. If that happens, the union would likely try to organize more Southern auto plants, such as BMW's in South Carolina and Daimler's in Alabama.

The UAW has tried without success for more than two decades to reverse its decline by organizing foreign-owned plants in the South. It has convinced the management of a couple of foreign automakers to recognize the union -- but each time the workers have voted, they've been turned down.

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The UAW's poor record in recognition votes isn't surprising, given the checkered past of the Detroit-based automakers whose workforces are represented by the union. That's why management at Nissan and other Japanese automakers with U.S. plants have staunchly opposed UAW representation.

VW, by contrast, has a different viewpoint than Toyota (TM), Nissan, or Honda (HMC). Officially, the automaker is neutral. Unofficially, the automaker's management is deeply divided, with many U.S.-based VW executives horrified by the pro-union attitudes of some German counterparts.

On Monday, Bernd Osterloh, a German labor official and member of VW's supervisor board, told VW workers in Chattanooga, "Don't believe hearsay." He said: "Use the opportunity to look at the UAW for yourselves and to decide if they should represent you."

In 1979, the UAW had about 1.5 million members in the U.S. In 2012, that number had dropped below 400,000.

Osterloh and other VW executives sympathetic to organized labor favor the formation of a "works council" in Chattanooga, a system patterned on Germany, where workers participate in decisions on workplace issues but not necessarily wages and benefits. Works councils are common in Germany and pervasive at VW plants, but some experts say they would be impractical or illegal in the U.S. without a union representing the workers.

More than a few VW workers in Chattanooga are highly suspicious of the labor movement's history of strikes, anti-management rhetoric, and instances of intimidation and violence. Prominent Tennessee politicians, including Sen. Bob Corker and Gov. William Haslam, have joined opponents of union organization at VW.

In a nifty bit of electioneering, the UAW has turned the supposed disadvantage of launching a campaign in a right-to-work state into an advantage. UAW campaigners have been urging VW workers to give representation a chance, since they'd be free by law to drop out of the union and stop paying dues at any time.

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Could it be that, in Chattanooga, the UAW has decided to break with history, shed its adversarial methods, and prove that a union can help a foreign automaker prosper in the U.S.? Chances are slim.

If VW's Chattanooga workers choose to be represented by the UAW, it won't be the first time. VW's first assembly plant in Westmoreland, Pa. opened in 1978 and closed in 1984. The plant had many problems; one was labor unrest: Westmoreland, in its short history with the UAW, had no fewer than six walkouts.

Perhaps the UAW is a different union today. Perhaps VW is a different company. The vote next week may show the world how short memories can be.

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