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Possible unionization by Volkswagen auto workers spurs political backlash in Tennessee

February 13, 2014 at 6:26 PM EDT
In Chattanooga, Tenn., workers at a Volkswagen plant are voting to decide whether to join the United Auto Workers union. While VW has remained neutral, state politicians and Republican Sen. Bob Corker have vocally opposed the union option. Jeffrey Brown gets views from Vincent Vernuccio of the Mackinac Center for Public Policy and Harley Shaiken of the University of California, Berkeley.
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JUDY WOODRUFF: Now: A union vote at a Tennessee auto plant is putting a spotlight on the future of organized labor in the South.

Jeffrey Brown has our story.

JEFFREY BROWN: They started voting yesterday in the snow at the V.W. plant in Chattanooga, at issue, whether to join the United Auto Workers. The vote comes in an era when many foreign automakers have moved to Southern states, where overall union participation is low, and as UAW membership has fallen dramatically, from 1.5 million members in 1979 to just over 382,000 in 2012.

JUSTIN KING, Volkswagen Employee: I’m proud to be working at Volkswagen.

JEFFREY BROWN: Hoping for a win in Chattanooga, the union has released YouTube videos of V.W. employees who are voting yes.

JUSTIN KING: Volkswagen will be stronger when they come together with the UAW, because that combines not only Volkswagen’s history of working with labor, but it also adds in UAW’s experience of working in the U.S. market.

JEFFREY BROWN: Volkswagen itself has remained officially neutral on the question. But it does want to set up a German-style works council to allow employees and management to collaborate on decision-making. Labor experts say by law that means the plant must first unionize. But support for the union is hardly unanimous.

SEN. BOB CORKER, R-Tenn.: I think everyone in the community knows that I have tremendous concerns about the UAW being a part of our community in this way.

JEFFREY BROWN: Among others, Republican U.S. Senator Bob Corker, once the mayor of Chattanooga, and a group called the National Right to Work group argue that unionization will jeopardize jobs. And Republicans who control the state legislature have threatened to withdraw millions of dollars in tax incentives for Volkswagen if the UAW wins.

Upping the ante, Senator Corker yesterday released this statement, saying: “Should the workers vote against the UAW, Volkswagen will announce in the coming weeks that it will manufacture its new midsized SUV here in Chattanooga.”

That was quickly disputed by Frank Fischer, chairman and CEO of Volkswagen Chattanooga. He said: “There is no connection between our Chattanooga employees’ decision about whether to be represented by a union and the decision about where to build a new product.”

The voting at the Chattanooga plant continues through tomorrow.

And now two views of what’s at stake in this vote.

Vincent Vernuccio is director of labor policy at the Mackinac Center for Public Policy, a free market research center in Michigan. And Harley Shaiken is a professor at the University of California, Berkeley, who specializes in labor issues.

Well, Harley Shaiken, let me start with you.

How big a deal is this and why does the UAW see a window of opportunity here?

HARLEY SHAIKEN, University of California, Berkeley: Oh, it’s a very big deal.

I think what’s at stake is the UAW and Volkswagen working together to create a new U.S. model to compete globally. That’s a very big deal, in large part because you’re going to have a works council representing all employees. You’re going to have the UAW as the union bargaining with Volkswagen on economic issues. And you have a very advanced plant.

What fuels this model is worker input at every stage of the manufacturing process. It’s new for the U.S., but Volkswagen has used this model in all its plants worldwide, with the exception of two in China, and one in Chattanooga. And, of course, in Chattanooga, that could change by tomorrow night.

JEFFREY BROWN: Well, Vincent Vernuccio, there is a lot of opposition to this. Explain it. Why would it be a bad thing for Volkswagen workers to join the UAW?

VINCENT VERNUCCIO, Mackinac Center for Public Policy: Well, I think a lot of the Volkswagen be workers are simply nervous.

They see Volkswagen working with the UAW. Volkswagen just signed an agreement with the union to allow the union to come in. And despite the questions of whether or not this works council can actually even work in America, if it’s even legal in America, the workers are seeing that both the company and the union are on the same side. And a lot of them are questioning, hey, who is representing us?  Who is coming to make sure that our interests are heard?

And when you have the union and the company working together, the workers may get lost in the shuffle.

JEFFREY BROWN: That’s your concern at this point?  I mean, the workers then — the workers can vote on this, right?  So they have the power to join the union.

VINCENT VERNUCCIO: The workers — the workers can vote on this. And the workers are facing a very quick election.

Remember, Volkswagen themselves were the ones that petitioned the National Labor Relations Board to have this election. And the speed that this election occurred is very rare within the industry. And a lot of workers are saying, a lot of workers who are opposed are saying, well, our views simply aren’t being heard.

Remember, Volkswagen is actually keeping the opposition out of the plant.

JEFFREY BROWN: Well, Harley Shaiken, respond to that, especially about the interests of the company. How do you — are they pushing for this?  And explain a little bit more about this model of the works councils.

HARLEY SHAIKEN: Sure.

Well, the company is not pushing it. The company is remaining neutral. And in a situation where employers often are so virulently against a union, it looks like pushing, but it is neutral. The workers are going to decide. What Vincent is essentially arguing — arguing isn’t an argument. It’s anti-union feeling masquerading as an argument.

And what I mean by that is, I think Vincent and many others who are so strongly opposed to this from the outside would prefer no union anywhere. And this is workers making the decision. If they don’t like the experience, they can vote the union out in a year. They will elect their representatives. They will ratify or not every contract that is negotiated.

Robert Wagner, the senator in the mid-1930s who wrote the basic labor relations law of the country, the Wagner Act, said at the time the free right to choose a union is the difference between despotism and democracy. That’s what is at stake.

What is unique about this particular model is, it builds on what the Japanese became so famous for in the 1980s, which was quality circles and lean production. This — and in that case, you have teams that are improving things in a given area.

With a works council, workers have voice in all aspects of a factory’s operation. And, in fact, worker representatives guide basic decisions for Volkswagen internationally. That is a very big deal. And, using this, Volkswagen has become one of the most successful automakers in the world. It’s the second largest auto company by sales.

And the value for stockholders rose by 107 percent over the last three years. That’s the highest of any automaker in the world over those three years.

JEFFREY BROWN: All right, let me ask Mr...

HARLEY SHAIKEN: So, it’s the successful model globally being applied here.

JEFFREY BROWN: Mr. Vernuccio, you can respond to that. What is so wrong with that model?

VINCENT VERNUCCIO: Well, it’s a good model, and it works in Europe.

First, there is a question of — the professor mentioned the Wagner Act, if it is even legal. The National Labor Relations Act prohibits what is known as company unions. And the reason they do that is because they don’t want a company colluding with the union against the workers or the company establishing a worker — a union to collude against the workers.

And, also, in the 1990s, there was this push to have kind of a works council, more cooperative management and union, union organization. It was called the TEAM Act. And it was actually passed by the Republican House and Senate. President Clinton vetoed it, so it never went into law.

And the AFL-CIO was one of the chief proponents trying to — or opponents trying to fight against it because they worried about management and the union getting too close and having the workers left out in the cold. So…

JEFFREY BROWN: All right, but I still would — but I still would like you to answer my question about why, in this case, would it be a bad idea, do you think, to — to unionize that plant?

VINCENT VERNUCCIO: Well, it’s going to be a bad idea for the workers.

And it is up to the workers. And I do applaud the company of giving the workers the ability to choose via secret ballot. The UAW tried to go in there last year and organize them via card check, where cards are signed out in the open and could be open to intimidation.

So they are doing it by secret ballot. I applaud the company for that. Good for them. But these workers are going to be at a disadvantage in the UAW. Remember, the UAW prides itself on what it calls democracy, and it prides itself on its pushing majority rule.

Well, unfortunately, for these new workers, that there are a lot of retirees, and there are a lot of senior workers that are going to be able to outvote them. And as we have seen with the Big Three up here in Michigan and in the strong UAW states, those new workers sometimes get the short end of the stick. That is why you have two tiers.

So these workers have to ask themselves a very hard question. With majority rule that the UAW prides itself on, what is democracy, is the interest of the minority going to be trumped by the majority workers that have more seniority and have different interests?

JEFFREY BROWN: All right, Harley Shaiken, do you — you started by saying the stakes are extremely high here. If the UAW wins, do you see the possibility of this spreading, particularly to other foreign automakers in the South?

HARLEY SHAIKEN: Oh, I think it absolutely could spread. It certainly won’t automatically spread. What is at issue is what happens at Volkswagen.

But I think the power of this is, this model works with everywhere else. It could work extremely well in this plant with this union, with these workers. And if it does, workers at Mercedes-Benz, workers at BMW, workers at Nissan are going to look at this and say, this is what these workers are gaining.

And I would like to pick up something that Vincent just said. Retirees don’t vote for officers, and they don’t vote on the contract. And in terms of how workers fare right now, we can look most recently as several weeks ago, when the Ford Motor Company announced last year’s results for North America. Ford is entirely unionized in its blue-collar work force in North America, record profits, $18.8 billion — $8.8 billion. Each worker received a check for $8,800.

JEFFREY BROWN: All right.

HARLEY SHAIKEN: What’s not to like?

JEFFREY BROWN: We do have to leave it there, I’m afraid.

Harley Shaiken and Vincent Vernuccio, we will watch for the election results. Thank you.

VINCENT VERNUCCIO: Thanks for having me on.