An Explainer: Volkswagen Plant in Chattanooga Begins to Vote on Union Question Today

After months of media coverage, the Volkswagen manufacturing facility in Chattanooga, Tennessee, will hold an NLRB election starting today to determine whether a union will guide future labor-management relations at the plant. If the union wins, Volkswagen and the UAW would establish a German-style works council, the first of its kind in the United States.

Last week, the United Auto Workers announced it had reached an agreement with Volkswagen to hold the vote. The two groups have reportedly been working together in advance of the election to coordinate their public statements and ensure the process moves smoothly. They have also reportedly worked out a post-election “road map,” with the UAW promising to halt all organizing activities for a year if it loses (except if another union starts an organizing drive), and the two sides agreeing to negotiate a collective bargaining agreement if the union wins.

In recent months, the union has expressed optimism about its chances of winning, as it claimed it had signed unionization cards from more than half of employees.

According to the UAW’s statement about the vote, “Chattanooga is the only major VWGOA assembly facility without labor representation. With a works council, the Chattanooga plant would have a seat at the VW Global Group Works Council. Ultimately, such a labor relations model would give workers an integral role in co-managing the company and providing input on workplace improvements that would contribute to the success of the company and the workers.”

As we’ve reported, a German-style works council can perform a variety of functions that facilitate better communication between employer and employees. However, it would not negotiate directly for wages and benefits or call for strikes the way a traditional union could. Some support works-councils as a way of giving employees a voice in the company in situations where joining a traditional union might not be possible or desirable.

The Volkswagen experiment has drawn national media attention for several reasons. First, the dynamic of the situation is unusual: Volkswagen has not actively opposed the formation of a union, and according to some sources, has even hinted that it might prefer one. The main opposition has come from outside businesses and political leaders. For example, Republican Governor Bill Haslam and Senator Bob Corker have repeatedly warned that unions would hurt Tennessee’s economic competitiveness. Grover Norquist has established a group called the Center for Worker Freedom that has fought the UAW on several fronts and has declined to say how much it is spending in its anti-union media campaign. In addition, the Right to Work Legal Defense Foundation filed charges on behalf of several Volkswagen employees who claimed the UAW misled or coerced them into signing union representation cards. However, at least one observer believes these claims are overstated.

According to the New York Times, “In another twist, … many workers want a union even though they say Volkswagen treats them well. In their view, a union would give them a greater voice and job security and help ensure that management communicated better and was more sensitive on scheduling.” This suggests that non-economic factors like having a voice in company policy could be important to employees.

Traditional economic benefits are at stake too. In recent days union officials have touted the $8,000 or more in profit sharing bonuses that Ford workers are getting this year as a signal for what the union could help VW workers achieve in Tennessee. The union has distributed flyers to employees that claim that 80% of UAW workers at auto plants earn $28.12 an hour, although some have noted that that figure describes what veteran workers make, which is significantly more than new hires earn.

The VW union campaign is also notable because the implications beyond Tennessee could be significant, and perhaps influence similar union drives at other auto manufacturing facilities in the South. Some believe that if the UAW wins, it may try to organize a BMW plant in South Carolina and a Daimler plant in Alabama.

However, if the union wins the election, the impact beyond Tennessee will take time to develop. While the UAW has indicated the Chattanooga election could signal “a new model of labor relations in the United States,” Professor Sachs has cautioned that “works councils in the U.S. must – at least under current law – function more as a supplement to unionization than as an alternative to unionization. This legal requirement limits, for better or worse, works councils’ potential to reorder industrial-relations systems in the United States.”