Thursday, October 23, 2014 · 11:07 a.m.

Anti-, pro-unionization efforts ramp up at Volkswagen

Local political, business leaders respond to issue

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Volkswagen employees are being faced with the prospect of unionization. (Photo: Staff)

Efforts to unionize Volkswagen of Chattanooga are underway, but forces of opposition are also organizing. And although there is work being done on both sides, some people, such as VW workers and community and political leaders, are hesitant to talk about it.

"It’s always been hard to be the guy who rocks the boat," Bill Visnic, senior analyst with online automotive shopping and research outlet Edmunds.com, said.

Volkswagen employees might be reluctant to discuss the issue of unionization because they fear backlash from company leaders or fellow co-workers, he said.

But Volkswagen executives have continuously said the decision to organize is up to the workers. And the National Labor Relations Act prevents employers from interfering with employees’ efforts to create a union.

Some political and community leaders didn’t have much to add to the conversation.

But leaders of the United Auto Workers Union are holding local meetings with Volkswagen employees.

And there is a think tank group called the Competitive Enterprise Institute out of Washington, D.C., that has a labor project aimed at getting the message out that letting the UAW into Volkswagen could have a major, potentially negative impact on the entire city of Chattanooga and its economy.

Background
For more than a year, leaders with the United Auto Workers Union have been eyeing Chattanooga's Volkswagen plant, and they are having discussions about the possibility of creating a German-style labor board.

But it’s still unclear what that kind of organization would look like.

UAW President Bob King—who is scheduled to leave that post in June 2014—has said that the union doesn't have a future unless it can organize workers in Southern states, such as Mississippi, Georgia, Alabama and Tennessee, according to Automotive News.

"It’s a unique opportunity, and the UAW recognizes that," Visnic said of the German-style system. "UAW has lost membership. The domestic carmakers have reduced their manufacturing footprint dramatically since bankruptcy. UAW membership is down considerably from what it was five years ago."

But many of the reasons people used to organize have become antiquated.

Historically, after initially organizing to help workers get humane treatment, the auto unions branched out into establishing middle-class earnings and benefits.

But by the ‘70s and ‘80s, auto manufacturing unions began to cramp the way auto companies worked.

Initially able to shift some power away from the company and give it to employees, many people began to think that union regulations became counterproductive and profit-zapping, according to Nooga.com archives.

Since then, union presence has dwindled in Southern right-to-work states, such as Tennessee, and in large part, federal law protects employees from mistreatment.

So now, the question is what more does a worker at Volkswagen need or want, Visnic said.

In January 2012, officials talked to Nooga.com about pay for Volkswagen employees. At that time, a Volkswagen spokesman said that—although VW workers start out at $14.50 an hour and workers in Spring Hill and other unionized plants start out at $15.78—after four years, Volkswagen employees are making more than unionized employees. 

After four years, union employees at General Motors in Spring Hill make $19.28 an hour. After three years at Volkswagen, employees make $19.50 an hour, according to Nooga.com archives. 

The General Motors union contract expires in 2015, according to the Knoxville News Sentinel.

But since last year, wages at Volkswagen have increased, a spokesman said. 

Production team members now start at $15 an hour and move to $16 in six months. The pay increases up to $21 per hour after five years. 

Employees are earning $20 at the three-year mark now. 

UAW leaders also recently spoke with Automotive News about prospects for Chattanooga unionization. 

Organizing efforts
In May, a brochure circulated at Volkswagen, and in it, some employees voiced the need for organizing.

And leaders of the German union IG Metall encouraged workers to join a union.

"The best way for us to solve problems in our company and contribute to its success is to have a true voice in the company, and the only way to accomplish this is through forming a strong union in our plant," Eric DeLacy, who works in the VW paint department, wrote in the brochure, according to archives.

But at a Thursday UAW meeting held at the IBEW electrical workers facility on Volunteer Drive, several people there declined to talk to Nooga.com.

And the leader of the meeting directed Nooga.com to regional UAW leader Gary Casteel, who didn’t respond to multiple requests for comment.

But Casteel recently wrote an opinion piece published in the Chattanooga Times Free Press in which he said the organizing efforts for a German-style union were underway, but that some people haven’t "taken the time to learn the facts relating to the VW system, culture and philosophy and who want to make this an ideological confrontation."

"VW workers in Chattanooga are simply exercising their legal right to form a union and should not be subject to threats and innuendo from politicians nor misrepresentation of the facts by anti-union attack groups," Casteel said.

He described the German model and said that Chattanooga shouldn’t be the only VW facility in the world that doesn’t have representation.

"For the Chattanooga plant to be an outlier weakens its position inside the VW system," he said in the column.

Upcoming event 

What: A public forum, "Chattanooga, UAW and Free Markets," organized by a local group called Citizens for Free Markets, said Patterson, who will be a speaker at the event

When: July 18, 6:30 p.m.

Where: Embassy Suites, 2321 Lifestyle Way 

For more information: Click here

Opposition to organization 
A labor project run by Matt Patterson, a senior fellow at the Washington D.C., nonprofit the Competitive Enterprise Institute, which advocates for "limited government, free enterprise and individual liberty," has put up a billboard near Shallowford Road that reads, "Auto unions ate Detroit. Next meal: Chattanooga."

Patterson said that the auto union’s influence on Detroit led to government bailouts of major auto manufacturers and hurt the national economy.

He said that the UAW needs to organize in the South, which King has also said.

But companies such as Volkswagen have been attracted to Southern states because they are right-to-work states, which have a fewer instances of organization.

"I worry that the people of Chattanooga [don’t] have all the info they need on how this could impact them," Patterson said. "It’s easy to say that it’s up to the factory workers. But it’s also true that the decision will affect everyone in Chattanooga by making the UAW more powerful."

Patterson said that unions impose rules and regulations on companies, which limits flexibility and ultimately drives up labor costs and hurts the business.

He said Detroit auto manufacturer leaders made bad decisions by letting the UAW form there.

And he wants Chattanooga leaders and residents to have a debate on the issue.

"I think that political leaders in Chattanooga—and this is just my opinion—they are afraid to take a public stand on the issue because you have a potentially very powerful, very political entity, which appears to be on the verge of coming into town," he said. "They are afraid to anger [them]. [The UAW] is known for throwing their money around and buying politicians."

Community, political leaders response
Mayor Andy Berke and Mayor Jim Coppinger took a trip to Germany recently to continue courting Volkswagen. 

Nooga.com asked several local and state leaders if having the UAW in Chattanooga would hurt or help the city.

Harr had no comment, and Sen. Bob Corker, who is also the former mayor of Chattanooga and helped negotiate the deal for VW to come here, couldn’t be reached.

But Corker recently told the Chattanooga Times Free Press that Volkswagen leaders are aware "that if the UAW became involved in the plant, it would be negative for the future economic growth of our state."

Corker also said he thought that leaders of the chamber think the UAW would hurt business recruitment in the state.

He said he isn’t trying to influence VW employees and that the decision should be left to workers, according to the article. And he also said the idea that a union is needed to bring in new production isn’t true.

David Smith, spokesman for Gov. Bill Haslam, said that one of the things that makes Tennessee great is that it is a right-to-work state.

According to the National Right to Work Legal Defense Foundation, right-to-work law secures employees’ rights to decide for themselves whether to join or financially support a union.

Smith said that ultimately the decision about unionization is up to employees and that the subject has not come up between state leaders and VW.

"The governor has spoken with a number of employees in Chattanooga, and they are very comfortable with the way things are now," Smith said via email. "Volkswagen continues to be very successful with the current structure."

Berke spokesman Lacie Stone said that the administration thinks the issue should be left up to Volkswagen of Chattanooga employees.

But Coppinger said via his spokesman that the UAW presence would hurt the county’s economy.

"I am concerned this UAW effort would impact our ongoing efforts to bring economic development to Hamilton County," Coppinger said. "Volkswagen’s Hamilton County facility is a shining example of not only manufacturing design, but outstanding commitment to employee opportunity and benefits, as many employees have said to me. I am not aware of a community in the country where the presence of the UAW has enhanced economic development."

Analysis
Visnic said that the issue of unionization has become political.

In previous generations, unions were about protecting workers from abuse and inhumane treatment. But that has evolved over the years. Issues of pay are still part of the union debates, but federal laws now regulate working conditions.

But in the past 10 years, there’s a new political dimension that has developed. And the Chattanooga situation is more complicated by the proposal of a German-style organization.

It’s unclear how that system would actually work. German-style organizations don’t have the adversarial relationships between workers and executives that unions in the United States have had.

What workers at Volkswagen will have to decide is what benefits a union would provide and if they want those benefits, Visnic said.

But he doesn’t buy the idea that unions were the reason that the Detroit automakers (except for Ford) needed a government bailout—although he said both sides could be argued.

And he said that the cost of labor at auto manufacturers is a "fairly small percentage of the overall cost of the car," so it’s hard to argue that labor costs were the sole reason for the Detroit downfall. But Visnic said that unions did get a little too much control.

And he doesn’t think that VW leaders are basing their decisions about expansion on whether the workers organize.

"What the company is going to base its decision on is where that investment is going to pay off most," he said.

Updated @ 9:53 a.m. on 7/15/13 for clarity.
Updated @ 11:34 a.m. on 7/15/13 to correct a factual error: Harr did not accompany Berke and Coppinger on the trip to Germany, as originally reported. 
Updated @ 2:53 p.m. on 7/15/13 to add more information as it became available.

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