A Stunning Defeat With Broad Implications For Labor: Tennessee Auto Workers Reject UAW Bid To Organize VW Plant

Hourly workers in Chattanooga, Tennessee narrowly voted to reject the UAW’s bid to unionize their Volkswagen plant. The union organizing drive was backed by the UAW,  VW’s German union, IG Metal, and the VW board of directors. The UAW’s goal was to bolster declining UAW membership and to slow the flight of automobile manufacturing to right-to-work states. Germany’s mighty IG Metal aided the organizing drive to protect VW jobs in high-labor-cost Germany under the guise of labor solidarity with their American brethren.

Germany’s co-determination rules, which equalize the number of labor and management seats on boards of directors, explain the VW’s board’s support of unionization of its U.S. plant. VW Germany went so far as to send instructions to its Tennessee plant to assist in, or at least not hinder, the pro-union campaign.

The UAW’s drive to unionize U.S. automotive manufacturing plants in the South and Midwest serves as a bell weather for organized labor’s prospects of gaining a union foothold in right-to-work states. The election has been closely watched by other foreign auto manufacturers, who have located in the South and Midwest to take advantage of lower labor costs and the U.S. market.

The VW vote indicates that auto workers in right-to-work states understand that the support of a foreign union to unionize their shop was a defensive move to limit outsourcing to lower-labor-cost parts of the world located in major consumer markets. The UAW’s Detroit model also appears to have taught autoworkers in right-to-work states to prefer an actual job that pays less than in unionized plants to no job at all.

Toyota, BMW, Mercedes, and Nissan USA can breathe more easily. The UAW defeat in Tennessee took place under the most favorable of circumstances for union organizers. After the VW defeat, it is hard to imagine the UAW cracking any plants in right-to-work states.

The IG Metal-UAW debacle in Tennessee adds to the list of organized labor failures at a time when it has a lock on the National Labor Relations Board under the Obama administration. Other bitter defeats include Michigan becoming a right-to-work state in 2012 and Boeing machinists caving to the threat of locating a major assembly plant expansion in South Carolina. Increasingly, economic conditions in right-to-work plants are dictating terms of work and pay in unionized plants. As unionized workers understand the growing impotence of union representation, the unionized labor force in private industry will continue its shrinkage towards zero, leaving only the besieged public sector unions.