In a defeat for organized labour in the South, employees at the Volkswagen plant here voted 712-626 against joining the United Auto Workers, even though the company did not oppose the unionization drive.
The UAW’s loss - in what was one of the most closely watched unionization votes in decades - is expected to slow, perhaps stymie, the union’s plans to organize other auto plants in the South. Two other German-owned plants, Mercedes-Benz in Alabama and BMW in South Carolina, have been among its top targets.
The vote this week came in a region that is traditionally anti-union and, as a result, many said the UAW faced an uphill battle. The union saw the campaign as a vital first step toward expanding in the South, while Republicans and many Tennessee companies feared that a UAW triumph would hurt the state’s welcoming image for business.
For the UAW, the effort occurred with one highly unusual - and highly favorable - circumstance. Volkswagen did not oppose the unionization drive, pledging to remain neutral and in ways offering quiet support to the union.
Nevertheless, Republican politicians in Tennessee as well as some outside conservative groups made sure that the plant’s nearly 1,600 workers heard plenty of anti-union arguments.
Gov. Bill Haslam, a Republican, warned that auto part suppliers would not locate in the Chattanooga area if the plant was unionized. Sen. Bob Corker, a Republican and former mayor of this city, said Volkswagen executives had told him the plant would add a new production line, making SUVs, if the workers rejected the union.
In a news conference and a series of interviews this week, Corker asserted that a union victory would make Volkswagen less competitive and hurt workers’ living standards.
To step up the pressure, state Sen. Bo Watson, who represents a suburb of Chattanooga, warned that the Republican-controlled Legislature was unlikely to approve further subsidies to Volkswagen if the workers embraced the UAW, a threat that might discourage the company from expanding.
Volkswagen officials had urged “third parties” to remain neutral and stay out of the unionization battle. Grover Norquist, the anti-tax crusader, helped underwrite a new group, the Center for Worker Freedom, that put up 13 billboards, warning that the city might become the next Detroit if the workers voted for the UAW.
Frank Fischer, chief executive and chairman of Volkswagen Chattanooga, rushed to respond after Corker said Volkswagen officials had told him they would expand the plant if the UAW was defeated. Some legal experts said that if Volkswagen officials made such a statement, it might be construed as an illegal intimidation or inducement to pressure the workers to vote against the union.
In a statement, Fischer said, “There is no connection between our Chattanooga employees’ decision about whether to be represented by a union and the decision about where to build a new product for the U.S. market.”
Volkswagen publicly did not oppose the UAW partly because its officials were eager to create a German-style works council, a committee of managers and blue-collar and white-collar workers who develop factory policies on issues like work schedules and vacations. Volkswagen, which has unions and works councils at virtually all its 105 other plants worldwide, views such councils as crucial for improving morale and cooperation and increasing productivity.
Many legal experts say it would be illegal to have a works council unless workers first voted to have a union. VW wanted Chattanooga to be the first plant in the United States to have a works council.
Many pro-union workers bought into the arguments about the benefits of a works council.
Jonathan Walden, an employee who works on the paint line for $19.50 an hour, said he backed a union and works council.
“The only problem we have in Chattanooga is if we fail to fully embrace Volkswagen’s corporate culture with people working together for a common goal,” he said. “If we can do that, there is no limit what we can achieve here.”
Watson, the state senator, attacked Volkswagen for taking a neutral-to-positive stance toward the UAW, saying its approach was “unfair, unbalanced and, quite frankly, un-American in the traditions of American labor campaigns.”
Republicans said the UAW badly needed a success at Volkswagen to gain members and dues money after its membership had fallen to less than one-third of its peak. Bob King, the UAW’s president, has long said one of his main goals was to unionize some transplants, or foreign-owned auto plants in the United States, partly to prevent them from pulling down wages and benefits at Detroit’s automakers.
Sean McAlinden, chief economist at the Center for Automotive Research, said, “Bob King has been very open that if they don’t organize the transplants, their future as a large automotive union is in jeopardy.”
He said the transplants accounted for 30 percent of auto sales in the United States, while Detroit’s automakers accounted for 45 percent and imports the remaining 25 percent.
McAlinden said one factor likely to cause some workers to vote to unionize was that Volkswagen’s average wage, around $19.50, was below that at many other transplants.
Andy Berke, the mayor of Chattanooga and a Democrat, voiced dismay with the threats of cutting off subsidies to VW and the warnings that a union victory would undermine the area’s business climate.
“Whatever is going on politically, the most important issue is jobs, and we shouldn’t let the politics of the situation interfere with bringing good middle-class opportunities to Chattanooga,” Berke said.