The perilous task of unionizing a U.S. Volkswagen plant

James Sherk / Bloomberg News /

Volkswagen Group of America’s plant in Chattanooga, Tenn., has experienced something unusual: a union welcomed by management but faced with resistance from some workers. A combination of outdated labor laws and union intransigence has created this oddity.

German law requires “works councils” in which management and labor groups meet to collaboratively sort out workplace issues. Consequently, there is a works council at every Volkswagen plant — except the one in Chattanooga. Now, under pressure from IG Metall, the German union, Volkswagen AG’s headquarters has decided it wants a works council in the U.S., too.

But there’s a hitch. U.S. labor laws prohibit companies from discussing working conditions with employee representatives — unless they belong to outside unions. In the 1930s, Congress feared businesses would create bogus “company unions” to keep union organizers at bay, so it banned “management-dominated” labor organizations.

This outlaws even innocuous employee-involvement programs. For example, Webcor Packaging Corp., based in Flint, Mich., created a council of elected employees and appointed managers to suggest improvements to its work rules, wages and benefits. The company wanted their employees’ input, yet the government ordered the council disbanded. .

This restriction makes little sense today. Few businesses feel the need to ward off organizing drives with company unions. Even without them, private-sector union membership has fallen to below 7 percent.

Most companies won’t risk the downsides of unionizing to get an employee-involvement program. The pressure from IG Metall has made Volkswagen the exception. The United Auto Workers wants to unionize the Chattanooga plant and create a legal works council. Volkswagen’s senior management has welcomed this overture with open arms.

A group of Volkswagen workers in Tennessee has been less enthusiastic. They are aware that almost every job lost in the auto industry over the past three decades has been a union job. With rare exceptions, nonunion auto plants have avoided mass layoffs, while unionized facilities have downsized again and again. Hopping on that bandwagon holds little appeal.

The UAW says it has majority support for union representation based on publicly signed cards. But some workers at the Chattanooga plant claim the UAW misled them about what signing the cards meant, and several have filed charges with the National Labor Relations Board.

For the UAW, whose membership has plummeted, the stakes are enormous. In announcing a push to organize Southern automakers a few years ago, UAW President Bob King said: “If we don’t organize these transnationals, I don’t think there’s a long-term future for the UAW.”

While unionizing Volkswagen would obviously benefit the UAW, it is less clear how it would benefit the workers. They already make slightly more than UAW pay scales in Detroit. If the union used its power as a cartel to raise wages too much, it would make Volkswagen’s cars less competitive and put their jobs at risk.

The UAW also makes removing poor performers almost impossible. It even got Chrysler workers who were suspended for smoking pot on the job reinstated.

UAW work rules further hamper productivity. Before GM’s restructuring, each plant had as many as 15 categories of workers, all strictly prohibited from doing one another’s jobs. If one worker’s absence stopped the assembly line, a worker of another type could not step up to the plate.

The union swears that it has changed, and that its works council will improve productivity. But workers would have to take the UAW’s word for it. The law won’t stop the union from negotiating a broader collective-bargaining agreement.

Many Volkswagen workers — correctly — look warily at the experience of Volkswagen’s only other U.S. plant, in New Stanton, Pennsylvania. The UAW organized the plant in 1978. Almost immediately, the workers went on strike. The plant lurched from strike to strike and shut down 10 years later.

Volkswagen’s employees in Tennessee have a good thing going. Some want more say in the workplace, but others fear winding up like New Stanton.

They should not have to make that choice. Congress should reform U.S. labor laws to allow employee participation — without requiring that an outside union get involved. Why should the government prevent companies from giving their workers a voice on the job?