UAW crashes in Volkswagen unionization defeat

Thomas Lifson
The United Auto Workers Union lost a hugely important unionization election vote at Volkswagen's Chattanooga, Tennessee assembly plant, going down to defeat in a 712-626 vote (53%-47%), with roughly 165 workers, or 11%, not voting. Thus, in fact, only 41.65% of the total workforce voted in favor of unionization.

This is a historic defeat for unionization of the private sector because VW represented the best, perhaps the only, chance for the UAW to organize the growing force of the American auto industry, foreign badged companies with assembly plants in the United States. There are actually two American automobile industries: unionized Ford, GM, and Chrysler (now a subsidiary of Turin, Italy-based Fiat), largely located in the Midwest, and 14 automobile plants owned by foreign-based companies such as Honda, Toyota, Nissan, Hyundai, BMW, and Mercedes-Benz, largely located in the South.

The legacy industry is completely unionized under the UAW, while the new wave Southern wing is completely non-union, and following the VW vote, likely to stay so for the foreseeable future. The UAW's membership has fallen drastically, from a peak of 1.5 million to 380,000 in 2013, as the unionized American companies have surrendered market share, and for two of them financial solvency, in favor of the lavish benefits and employment guarantees demanded and won by the UAW in decades past.

The UAW knows that VW was by far their best shot at breaking into the new wave industry because the company itself did not oppose unionization, and allowed UAW organizers to speak directly to workers on company facilties. That is because the company's German union, IG Metall, which has a say in the company's management thanks to the German system of "works councils," was anxious to see unionization spread to their American brothers and sisters. While some of this may have been due to what unions call "solidarity," another portion of the interest may have been in seeing that the company not have a strong economic and operating incentive to send even more auto production overseas, out of high-cost Germany. The company maintains production facilities around the world, in Germany, Mexico, Slovakia, China, India, Indonesia, Russia, Malaysia, Brazil, Argentina, Portugal, Spain, Poland, Czech Republic, Bosnia and Herzegovina, and South Africa, and is one of the world's biggest car manufacturers, competing globally with the likes of Toyota, Ford, and GM.

The UAW is now crying foul:

[UAW President Bob] King said he was outraged at what he called "outside interference" in the election. He wouldn't rule out challenging the outcome with the National Labor Relations Board.

"It's never happened in this country before that the U.S. senator, the governor, the leader of the House, the legislature here, threatened the company with no incentives, threatened workers with a loss of product," King said. "We'll look at all our options in the next few days."

The union could contend that Corker and other local politicians were in collusion with VW and tried to frighten workers into thinking the SUV would be built in Mexico if they voted for the union, said Gary Chaison, a labor relations professor at Clark University in Worcester, Mass.

And in fact Republican political leaders in Tennessee were dead set against unionization:

Sen. Bob Corker of Tennessee was the most vocal opponent, saying that he was told that VW would soon announce plans to build a new SUV in Chattanooga if workers rejected the union. That was later denied by a VW executive, who said the union vote had no bearing on expansion decisions. Other state politicians threatened to cut off state incentives for the plant to expand if the union was approved.

The UAW and the AFL-CIO have thrown their lot in with the Democratic Party, supply vast fund and manpower to it, so it should be no surprise that it has enemies in the GOP. They have also managed to kill jobs in the private sector, so it should be no surprise that workers, looking at the track record, might conclude that a vote for unionization would bring to Chattanooga the same the same forces that have devastated Detroit. They had some help in understanding this:

Edward Hunter, 43, of Soddy-Daisy, Tenn., said Tennessee politicians argued that the UAW caused the downfall of Detroit, and some of his coworkers bought it.

One billboard, paid for by Grover Norquist, a Washington, D.C.-based anti-tax lobbyist, reads "Detroit: Brought to you by the UAW" next to an image of the long-abandoned Packard Plant ruins. Another billboard shows a graffiti artist's red "X" over the word "Auto" in the union's title replaced with a crudely lettered "Obama."

The American union movement is now even more solidly a government employee phenomenon, which makes it all the more vulnerable to public opinion which is shifting to a negative opinion towards it, as self-serving and greedy. The fact is that government wages and work demands are now out of balance with the rest of the economy, with government workers enjoying more perks, higher income, and less demanding work schedules and conditions that the rest of the taxpaying public performing similar work.

The Tennessee vote may prove to be a decisive factor in the decline of unions and their alienation from the broader public. If the GOP shodl gain control of Congress and the presidency in 2017, they should go in for the kill (something they have never had the guts to do out of fear of a public backlash) and restore the ban on government unions making political contributions. The unions may scream, as they did when Wisconsin Governor Scott Walker and the state legislature instituted reforms, but unions no longer have a broad mantle of legitimacy in the eyes of the American public.

The United Auto Workers Union lost a hugely important unionization election vote at Volkswagen's Chattanooga, Tennessee assembly plant, going down to defeat in a 712-626 vote (53%-47%), with roughly 165 workers, or 11%, not voting. Thus, in fact, only 41.65% of the total workforce voted in favor of unionization.

This is a historic defeat for unionization of the private sector because VW represented the best, perhaps the only, chance for the UAW to organize the growing force of the American auto industry, foreign badged companies with assembly plants in the United States. There are actually two American automobile industries: unionized Ford, GM, and Chrysler (now a subsidiary of Turin, Italy-based Fiat), largely located in the Midwest, and 14 automobile plants owned by foreign-based companies such as Honda, Toyota, Nissan, Hyundai, BMW, and Mercedes-Benz, largely located in the South.

The legacy industry is completely unionized under the UAW, while the new wave Southern wing is completely non-union, and following the VW vote, likely to stay so for the foreseeable future. The UAW's membership has fallen drastically, from a peak of 1.5 million to 380,000 in 2013, as the unionized American companies have surrendered market share, and for two of them financial solvency, in favor of the lavish benefits and employment guarantees demanded and won by the UAW in decades past.

The UAW knows that VW was by far their best shot at breaking into the new wave industry because the company itself did not oppose unionization, and allowed UAW organizers to speak directly to workers on company facilties. That is because the company's German union, IG Metall, which has a say in the company's management thanks to the German system of "works councils," was anxious to see unionization spread to their American brothers and sisters. While some of this may have been due to what unions call "solidarity," another portion of the interest may have been in seeing that the company not have a strong economic and operating incentive to send even more auto production overseas, out of high-cost Germany. The company maintains production facilities around the world, in Germany, Mexico, Slovakia, China, India, Indonesia, Russia, Malaysia, Brazil, Argentina, Portugal, Spain, Poland, Czech Republic, Bosnia and Herzegovina, and South Africa, and is one of the world's biggest car manufacturers, competing globally with the likes of Toyota, Ford, and GM.

The UAW is now crying foul:

[UAW President Bob] King said he was outraged at what he called "outside interference" in the election. He wouldn't rule out challenging the outcome with the National Labor Relations Board.

"It's never happened in this country before that the U.S. senator, the governor, the leader of the House, the legislature here, threatened the company with no incentives, threatened workers with a loss of product," King said. "We'll look at all our options in the next few days."

The union could contend that Corker and other local politicians were in collusion with VW and tried to frighten workers into thinking the SUV would be built in Mexico if they voted for the union, said Gary Chaison, a labor relations professor at Clark University in Worcester, Mass.

And in fact Republican political leaders in Tennessee were dead set against unionization:

Sen. Bob Corker of Tennessee was the most vocal opponent, saying that he was told that VW would soon announce plans to build a new SUV in Chattanooga if workers rejected the union. That was later denied by a VW executive, who said the union vote had no bearing on expansion decisions. Other state politicians threatened to cut off state incentives for the plant to expand if the union was approved.

The UAW and the AFL-CIO have thrown their lot in with the Democratic Party, supply vast fund and manpower to it, so it should be no surprise that it has enemies in the GOP. They have also managed to kill jobs in the private sector, so it should be no surprise that workers, looking at the track record, might conclude that a vote for unionization would bring to Chattanooga the same the same forces that have devastated Detroit. They had some help in understanding this:

Edward Hunter, 43, of Soddy-Daisy, Tenn., said Tennessee politicians argued that the UAW caused the downfall of Detroit, and some of his coworkers bought it.

One billboard, paid for by Grover Norquist, a Washington, D.C.-based anti-tax lobbyist, reads "Detroit: Brought to you by the UAW" next to an image of the long-abandoned Packard Plant ruins. Another billboard shows a graffiti artist's red "X" over the word "Auto" in the union's title replaced with a crudely lettered "Obama."

The American union movement is now even more solidly a government employee phenomenon, which makes it all the more vulnerable to public opinion which is shifting to a negative opinion towards it, as self-serving and greedy. The fact is that government wages and work demands are now out of balance with the rest of the economy, with government workers enjoying more perks, higher income, and less demanding work schedules and conditions that the rest of the taxpaying public performing similar work.

The Tennessee vote may prove to be a decisive factor in the decline of unions and their alienation from the broader public. If the GOP shodl gain control of Congress and the presidency in 2017, they should go in for the kill (something they have never had the guts to do out of fear of a public backlash) and restore the ban on government unions making political contributions. The unions may scream, as they did when Wisconsin Governor Scott Walker and the state legislature instituted reforms, but unions no longer have a broad mantle of legitimacy in the eyes of the American public.