US: Volkswagen treads carefully on Tennessee unionisation

By Graeme Roberts | 29 November 2013

Volkswagen Group is trying to reach an acceptable compromise over possible union representation at its plant in Tennessee as its influential German union (and the US United Auto Workers or UAW) pile on pressure.

So called southern transplants such as the VW factory, which makes the US version of the Passat, and plants run by Honda, Nissan, BMW and Mercedes, are mostly non union while plants in the north tend to be 'organised' by the UAW. The UAW has lost hundreds of thousands of members as older plants have closed in recent decades and has recently emphasised its aim to organise - unionise - more of the newer plants. The automakers have resisted this, in particular, of late, Nissan.

Reuters noted in a recent report Volkswagen is trying to introduce its model of a German style works council, which would help set work rules for white- and blue-collar workers at the US plant in Chattanooga.

Volkswagen has works councils at all of its plants outside of China and Tennessee, but faces challenges in forming one in Chattanooga for various reasons, including a split within the company over whether to support the UAW.

IG Metall, the German union with seats and influence in VW's boardroom, is pressing the company to establish a works council at Chattanooga and also supports the UAW's bid to organise the plant.

It is IG Metall's influence and the company's need to keep labour peace in Germany that has Volkswagen's US officials careful not to get things wrong, the news agency noted. At the same time, they also are trying to maintain good relations with Tennessee state politicians, led by anti-UAW governor Bill Haslam and US senator Bob Corker, both Republicans.

In China, VW plants are jointly owned with Chinese partners, making the Chattanooga plant, opened in 2011, the company's only wholly owned plant without a works council, Reuters said.

Volkswagen cannot form a works council only in Tennessee because US labour law does not allow for company-sponsored unions. In order to set up a works council for the 1,570 hourly paid manufacturing workers at Chattanooga, a US union needs to be involved, because a foreign-based union cannot represent US workers.

A works council at Chattanooga would act largely as it would in Germany and not negotiate wages and benefits.

According to the report top VW US executive Jonathan Browning said recently the company prefers establishing a German-style works council at the plant but stopped well short of showing any support for the UAW.

"Our strong desire is to have a works council present in Chattanooga," Browning said. "The challenge in a US context is how to bring that into being."

Ultimately, VW's management board will decide whether to allow a works council at Chattanooga working with the UAW or another US union while Browning added it was up to the Chattanooga workers to vote on union representation.