The fight over unionization at Volkswagen’s only U.S. plant in Chattanooga, TN, is turning into something akin to the best-of-seven contests that settle professional sports championships.
“If you lost by 29 votes, would you walk away and give up?” one United Auto Workers official observed after the votes were counted in the latest of three votes in Chattanooga.
The UAW lost, 833-776, but a shift of 29 votes could have changed the outcome. The tally by the National Labor Relations Board indicated approximately 70 employees did not cast a ballot.
Union spokesman Brian Rothenberg says the UAW hasn’t decided on its next step in Chattanooga. “It will be up to the workers to decide,” he tells Wards.
Rothenberg adds Local 42, a separate UAW unit representing truck drivers at Chattanooga, was created after the union won a 2015 election, 106-44.
Another separate UAW local representing maintenance workers was recognized by the NLRB but not VW, which said it didn’t want to bargain with a splinter unit. It was effectively disbanded during the legal maneuvering that led up to the union’s narrow defeat June 14.
The union, which also lost the initial vote by a relatively small margin in 2014, faces significant challenges as it tries to widen its tiny beachhead in the South’s nonunion auto sector.
Joseph Phillippi, president of the AutoTrends consultancy, notes workers employed at the plants operated by European and Asian automakers in the Southeast are screened for pro-union sentiment even before they are hired.
“Aside from the assemblers locating in right-to-work states, the majority of the hires do not come with a family/personal history of union membership,” he says.
“The transplants all carefully screen potential hires, often having co-workers vote on them. They all emphasize work teams, with lots of training/coaching. The plants are obviously new and focused on working conditions. The pay is good, the benefits are broad,” Phillippi says.
Meanwhile, Volkswagen is promising to build an $800 million addition to the Chattanooga plant and adding 1,000 new workers by 2022.
“The UAW couldn’t overcome Volkswagen’s pitch that workers are better off without a union dunning their paychecks for dues and perhaps making the plant less competitive,” an editorial in the Wall Street Journal observed. “Wages and benefits for production workers can add up to $23.50 an hour, which is well above the median in Chattanooga.”
The latest organizing campaign in Chattanooga, like the one the UAW lost in 2014, was marked by the involvement of Republican officeholders and conservative groups. The union countered with its own advertising campaign and home visits by pro-union workers.
The contest left Volkswagen’s workforce deeply split over the need for the union, creating challenges for VW’s local management.
Before the vote, the automaker had scrambled to make changes inside the plant to accommodate workers before the voting started, according to observers.
“Managers made a series of improvements. They began cooling the plant earlier in the week, changed the wardrobe policy to allow shorts, adjusted the weekly shift schedule from five 8-hour days to four 10-hour days and booted out multiple managers, including the unpopular plant CEO Antonio Pinto,” an article in The Nation written after the vote noted.
“The union should have trumpeted these improvements as the first union victories workers had won – ‘Look how powerful you are, and you haven’t even gotten to the table yet!' It didn’t,” the left-leaning magazine added.
VW also brought back Frank Fischer to serve as plant CEO. Fischer, who developed close ties to Tennessee’s Republican establishment during his first tour in Chattanooga, issued a letter personally apologizing to workers for their treatment by previous management.
VW insists it is moving forward.
“We are one integrated team and everyone is entitled to his or her own opinion,” the automaker says in a statement e-mailed to Wards. “Our operations are not affected because we maintain an open dialogue with our colleagues. Our mission as a company remains unchanged – we are dedicated to building quality careers and quality products in Chattanooga. We have a solid foundation for success: process, innovation, technology and talent.”
VW faces other headwinds. Sales of the Atlas SUV (above, left) built at Chattanooga have increased this year. But a J.P. Morgan study suggests sales of new vehicles could drop 30% by 2022. An industrywide sales slump and the ongoing challenge of overcapacity would put pressure on manufacturers to slow production and hold down costs.