4/24/2014 Union Vote At VW Factory In Tennessee Will Send Tremors Through U.S. Auto Industry - Forbes
http://www.forbes.com/sites/joannmuller/2014/02/03/union-vote-at-vw-factory-in-tennessee-will-send-tremors-through-u-s-auto-industry/print/ 1/2
AUT O S | 2/03/2014 @ 7:32PM | 34,942 views
Union Vote At VW Factory InTennessee Will Send TremorsThrough U.S. Auto Industry
No matter the outcome, next week’s vote by Volkswagen’s 1,500 U.S. workers
on whether to join the UAW will have far-reaching implications for the entire
American auto industry.
The secret-ballot election, conducted by the National Labor Relations Board,
is scheduled for Feb. 12-14 at VW’s three-year old assembly plant in
Chattanooga, Tenn. It is the first time in 13 years that the UAW has sought
the right to represent workers at a foreign-owned assembly plant. In 2001, the
UAW lost a bid to organize Nissan workers in Smyrna, Tenn., by a 2-1 margin.
A UAW win this time around could bolster the union’s efforts to organize
other foreign-owned factories, and reverse a decades-long decline in
membership. It would also likely lead to higher wages at VW and potentially
other non-union plants, narrowing the earnings gap between foreign and
domestic auto workers in the U.S.
A loss, however, would likely suppress wages across the industry, even at
unionized plants owned by General Motors, Ford Motor and Chrysler Group,
a unit of Fiat Chrysler Automobiles, which in recent years have introduced
lower wage scales for new hires in order to remain competitive with their
foreign-owned rivals. Current labor contracts with Detroit automakers expire
Joann Muller, Forbes Staff
I write about industrial innovation and the global auto industry
4/24/2014 Union Vote At VW Factory In Tennessee Will Send Tremors Through U.S. Auto Industry - Forbes
http://www.forbes.com/sites/joannmuller/2014/02/03/union-vote-at-vw-factory-in-tennessee-will-send-tremors-through-u-s-auto-industry/print/ 2/2
This article is available online at:
http://www.forbes.com/sites/joannmuller/2014/02/03/union-vote-at-vw-factory-in-tennessee-
will-send-tremors-through-u-s-auto-industry/
in 2015, and UAW President Bob King, who retires in June, has said he wants
to see an end to the two-tier pay system.
Tennessee politicians and business groups, including Tennessee Gov. Bill
Haslam, are opposed to the unionization effort, saying that auto makers and
their suppliers would avoid investment in the state if the UAW succeeds at
VW.
Still, the upcoming vote looks to be the UAW’s best chance yet to organize
auto workers in the South, where anti-union sentiment has attracted
manufacturers like Toyota, Nissan, Hyundai, Kia, Mercedes and BMW. That’s
because Volkswagen is not opposing the unionization drive, in the hopes that
it will lead to creation of a European-style “works council” in Tennessee
similar to those it has at other plants around the world. The works council
allows workers and managers to collaborate on the running of the plant,
setting work rules, schedules and other conditions, but not wages or benefits.
Under U.S. labor law, however, a company can only have a works council if
the labor force is represented by an outside union. UAW organizers are
optimistic about the election, saying the majority of workers have already
signed cards backing a union.
UAW membership has fallen steadily since reaching a peak of nearly 1.5
million in 1979 to almost 400,000 in 2012. Detroit’s declining market share,
along with increased automation and outsourcing, are to blame. The only
foreign automaker in the U.S. that is unionized is a Mitsubishi Motors
assembly plant in Illinois.
“Volkswagen Group of America and the UAW have agreed to this common
path for the election,” said Frank Fischer, chairman and CEO of Volkswagen
Chattanooga, in the statement. “That means employees can decide on
representation in a secret ballot election, independently conducted by the
NLRB. Volkswagen is committed to neutrality and calls upon all third parties
to honor the principle of neutrality.”
“Employees have the right to decide, by voting in a secret ballot election, on a
matter that concerns their own interests,” said Sebastian Patta, vice president
of human resources at the plant in Chattanooga. “Volkswagen respects this
democratic right at all locations world-wide.”
The Chattanooga plant, which opened in May 2011, manufactures about
150,000 VW Passat sedans a year. The union vote comes at a critical time,
when VW’s top management is considering where to build a new sport-utility
vehicle for the U.S. market. Chattanooga has the capacity to build as many as
250,000 vehicles a year, making it a likely choice.
Top Related