In the days since workers at the Volkswagen plant in Chattanooga, Tennessee, rejected a proposal to unionize, the United Auto Workers has worked overtime to spin the loss: this was all part of a right-wing movement to destroy worker representation, union supporters say,and the vote was manipulated by local and state politicians who had no business involving themselves in a business matter.
Yet this narrative falls apart under scrutiny. The Chattanooga rejection of the UAW was exactly that: the rejection of a single union that failed to make a persuasive case to the Tennessee workers and, despite profiting immensely from the federal bailouts of General Motors and Chrysler, is in dire straits after deciding to reward longtime members at the expense of new backers. In fact, the 712-626 vote can be seen as showing solid support for worker representation and for a German-style "works council" that VW management, too, backs. Rather, what what shot down was mandatory unionization as a prerequisite for those works councils -- something the UAW insists is required under the federal labor law.
Let's deal with the politicization charge first: The UAW’s bitter complaints about political opposition to its organizing drive simply underlies the lack of pushback it got from management, the typical villain in union rhetoric. Those who claim that Tennessee politicians unfairly affected the election seem to forget that President Barack Obama himself very publicly took the UAW's side. He also played his hand poorly: By arguing that union opponents are “more concerned about German shareholders than American workers,” Obama tied himself to the UAW while doing nothing to forward a positive case for unionization.
Once the issue entered the partisan fray, Tennessee's being a red state naturally favored an anti-UAW result. But this isn’t the whole story. The fight also highlighted the increasing politicization of the auto industry in the wake of the Detroit bailout, a development that very few Americans genuinely cheer. With the UAW’s offer to Chattanooga workers essentially consisting of membership in a political organization, it was pitting itself against the apolitical majority as well as the pride many workers take in being part of companies that have not relied on politicized rescues to survive.
Politics aside, the defeat highlights the UAW's biggest problem: It was almost impossible to make a positive case for unionization to the VW workers because because of the UAW's profoundly unfair two-tier wage structure. As GM and Chrysler limped toward bankruptcy, the UAW was forced to make wage concessions, and it forced the brunt of the sacrifice on new hires. They now make about half the traditional UAW wage. With old-timers still enjoying the unsustainable quality of life they enjoyed during Detroit’s glory days, and doing it on the backs of younger workers, the UAW’s oft-professed commitment to “solidarity” falls apart. Moreover, the pay structure forces the UAW entry wage down to the point where it offers no real advantage over non-union wages in plants such as Chattanooga's, once one factors in union dues.
The UAW recognized this in the “neutrality agreement” it made Volkswagen management, agreeing on “maintaining and where possible enhancing the cost advantages and other competitive advantages that [Volkswagen] enjoys relative to its competitors in the United States and North America." Constrained by both its two-tier wage structure and its need to overcome the perception that it helped bankrupt GM and Chrysler, the UAW undercut its ability to improve wages in Chattanooga from day one. Is it any surprise then, that workers rejected a union that offers neither improved wages nor even real solidarity?
If the union doesn’t come to terms with its fundamental problems, it can’t expect anything other than further rejection. Moving the referendum on its value to Tesla workers in California, let alone Mercedes workers in Alabama, isn’t likely to change the result. Continuing to insist it speaks for all workers will only fan the flames of dissent in its own ranks, where anger at an autocratic leadership long predated the unhappiness with two-tier wages. If Volkswagen decides to build a new SUV in Mexico instead of Chattanooga, backlash against the UAW could grow stronger still.
Yet amid the bad news for the UAW comes some possible good news for American auto workers: With Volkswagen apparently eager to form some kind of works council in Chattanooga despite the UAW rejection, some of Germany’s labor co-determination ideas may get the chance to be tested in the US. Criticism of the National Labor Reform Act’s restriction of non-union labor organizations has been growing for some time, perhaps to the point where Congress may act. If not, Volkswagen’s Chattanooga vote seems like an opportunity to pilot a council on the model that Volkswagen uses around the globe but that complies with U.S. regulations. This would be an invigorating experiment for U.S. labor relations, which often seem stuck in a bygone era. For the sake of its success, it should be undertaken as far from the UAW’s deeply politicized orbit as possible.
(Edward Niedermeyer, an auto-industry consultant and former editor of the blog The Truth About Cars, is a contributor to the Ticker. Follow him on Twitter @Tweetermeyer.)
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