Volkswagen Employees in Tennessee Could Help Determine the Future of the United Auto Workers
The membership and influence of the United Auto Workers union has been shrinking for decades. In the latest effort to reverse that trend, the union will try to win a vote this week at Volkswagen's only US plant.
More than 1,700 hourly workers at the Volkswagen (VLKAF) plant in Chattanooga, Tennessee, will get to vote Wednesday, Thursday or Friday on whether they want the union to represent them. The union narrowly lost a similar vote five years ago.
A win for the union would be historic. Foreign automakers, such as VW and Toyota (TM), own 31 factories and produce nearly half of the cars built in the United States. None of those foreign-owned plants have ever been unionized. Workers there are generally paid less than workers represented by the UAW.
The Volkswagen plant would boost UAW's flagging membership. It represented more than 1 million people at auto assembly plants in the 1980s, but only 155,000 at GM, Ford and Fiat Chrysler today. Plant closings, automation, the shift of production to Mexico, and the rise of foreign companies have taken their toll.
The UAW desperately needs to break through at a so-called transplant factory.
"It is important for the UAW to nab one of the plants to rebuild membership as well as clout," said Michelle Krebs, senior analyst with Cox Automotive. "But I'm not optimistic it's going to happen."
The timing matters, too. The UAW faces tough negotiations with General Motors (GM), Ford (F) and Fiat Chrysler (FCAU) on a new round of labor deals later this year.
Jobs will be a big issue. GM, for example, is closing four American plants. Looming in the background are competitive pressures from the nonunion transplant factories.
The ability of the UAW "to set wages for the industry is shrinking," said Kristen Dziczek, vice president of industry, labor and economics for the Center for Automotive Research. "When the Detroit automakers lose share, the UAW loses share."
The UAW says the average worker at the Volkswagen plant makes about $21 an hour, compared to $28 an hour at a unionized auto plant. Volkswagen said annual pay, including overtime and bonuses, at the Chattanooga plant came to an average of $54,700 last year.
"We are among the best paying employers in the region," the company said in a statement.
Krebs said the gap between unionized and nonunion plants is shrinking.
A decade ago, the union made concessions to help keep GM, Ford and Chrysler alive in the face of lower-cost competition from foreign automakers. And it has never fully recovered. Gaining a foothold in a transplant factory would give the UAW an edge.
"If all the plants were UAW represented, they'd have more power over the automakers," she said. But that hasn't been the case for the US auto industry since the early 1980s when the transplants first started opening.
As GM's Lordstown plant idles, an iconic American job nears extinction.
The VW plant in Chattanooga would seem to be one of the UAW's better opportunities to win a vote. A member of the German autoworkers union sits on VW's board of directors. More than 100 VW plants worldwide employ union-represented workers — everywhere but in China and at the Chattanooga plant.
"Chattanooga workers deserve this vote," said UAW spokesman Brian Rothenberg.
During the last vote in Chattanooga five years ago, the union narrowly failed, getting support of 47% of the employees who voted.
Some Republican politicians in Tennessee, a state known for its tough anti-union policies, felt that VW had been too solicitous of the workers. After that vote, the UAW commended the company for trying to "provide an atmosphere of freedom to make a decision."
But this time around, the two sides have clashed far more. Each side has filed complaints with the National Labor Relations Board, which will oversee this upcoming vote.
Most of the foreign-owned auto plants are located in the South, which has a far lower level of union membership than in the industrial Midwest, where most of the unionized plants of the Detroit automakers are located. It also means the UAW faces an uphill battle, even if it wins the vote at VW.
"I don't know if it necessarily translates to making it easy to win over workers with anyone else," said Dziczek. "It would be an important win, but not sufficient."