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Union suffers significant loss in Tennessee

February 15, 2014 at 4:20 PM EDT
Workers at a Volkswagen plant in Tennessee voted to reject what would have been United Auto Workers’ first successful organization of workers at a foreign automaker in the South. Jim Efstathiou of Bloomberg News speaks with Hari Sreenivasan about the significance of the vote.

HARI SREENIVASAN: We want to go more deeply now into that important union vote in Tennessee. For more, we are joined by Jim Efstathiou Jr. He has been covering the story for Bloomberg News.

So why was this vote so significant?

JIM EFSTATHIOU: Well, it was a first – it would have been a first for the union – for the UAW – to actually organize a planet in the South — a foreign-owned carmaker. So that was the significance. It was seen as a chance for them to get a foothold in a region that traditionally really difficult for union organizing.  That was primarily the significance there.

HARI SREENIVASAN: Most of these are right-to-work states. So what were the outside forces that were using this as sort of their big battleground>

JIM EFSTATHIOU: Well you had Republican politicians – Governor Haslam, Senator Corker, and state senators as well, state politicians. Their argument was basically that this would make the state less competitive. Companies would look at Tennessee and think that now there’s a higher chance that we could be facing a union drive – I’ll go to South Carolina or Alabama instead. So they pitched that line pretty hard.

There was also some interest groups – some Washington-based interest groups – that were sort of using the vote as a proxy to kind of attack the unions for its connections  with the president.

HARI SREENIVASAN: So explain this idea about the “workers’ council.” Volkswagen really saw this as a way to get to something they do in a lot of their other plants. What is that?

JIM EFSTATHIOU: This is the only major Volkswagen in the world that doesn’t have union affiliation. The “works council” was a German sort of creation that gives the employees a seat at the table in terms of day-to-day operations and staffing issues, things like that. Not for collective bargaining – that’s the union’s job. In Germany there are works councils and unions. There are no works councils in the US. This was kind of an experiment in a way. The vote was to join the UAW for purposes of collective bargaining. The agreement between Volkswagen the UAW was that they would negotiate the formation of a works council.

HARI SREENIVASAN: So really Volkswagen wasn’t pushing the union it just wanted to have what they have everywhere else.


HARI SREENIVASAN: And so what are the longer-term consequences? Does Volkswagen have a chance to build that in any other way? Or is it illegal to do that without having a union?

JIM EFSTATHIOU: Talk to lawyers – I think most would say that it’s illegal to do it without a union. That was the step they had to take. So at this point what they can do is unclear. It’s really uncertain whether they will try again.

There are other targets for the UAW in the South. It’s likely that they’re going to try in again in other plants, maybe in Alabama or some other states.

HARI SREENIVASAN: So that’s where the UA’s going to have to focus next?

JIM EFSTATHIOU: Well, I think that’s their best shot at this point.  This was a tough loss because they did have the company neutral – giving no resistance to the effort and they couldn’t turn it. It was a bit of a surprise I think for people down there. I talked to some workers down there on Monday and they were confident that this was going to go their way. So it was a disappointment for the union for sure.

HARI SREENIVASAN: Jim Efstathiou from Bloomberg, thanks so much.