With Julia Tavlas, originally published in Forbes
The United Auto Workers union, having looted and stripped Detroit bare, have set their sights south, to the right-to-work states and the foreign-owned auto plants they host.
German car maker Volkswagen, for example, has operated an assembly plant in Chattanooga, Tennessee since 2011, producing Passat sedans. The factory has 3,350 employees, making it vital to the economic health one of the state’s largest cities.
In 2011, UAW head Bob King met with leaders of IG Metall, a large umbrella union which represents Volkswagen workers in Germany, to secure their support in his efforts to unionize the Tennessee Volkswagen plant. He initially received a lukewarm reception from his German counterparts. An IG Metall official, Peter Donath, cautioned King that the UAW could count on little actual help: “we will support the UAW, but we will not support the UAW’s work.”
That was then.
But it seems Mr. King’s repeated appeals to transitional union solidarity have finally borne fruit. In March 2013 IG Metall President Berthold Huber dispatched a letter addressed to the VW Tennessee workers, urging them to accept a UAW presence. Huber made clear his organization’s (new) position:
“[I]n Chattanooga, you need union representation…we strongly recommend that eligible employees at Volkswagen, Chattanooga, decide that UAW should represent them.”
Whatever the cause for the Germans’ change of heart, Bob King is surely breathing a sigh of relief that Huber is beseeching Tennessee Volkswagen workers to join forces with the UAW. Certainly, King needs all the help he can get; in the last decade he has failed repeatedly to convince workers at, among others, Nissan plants in Tennessee and Mississippi, of the virtues of a UAW representation, although he has publicly stated that the very existence of his organization depends on successfully infiltrating foreign-owned auto operations:
“We’ve got very aggressive campaigns going on at the transnationals,” King said in an interview quoted in Bloomberg. “We know that’s key…[to] the long-term security of our membership.”
This time King hopes to entice Chattanooga workers by proposing a German-style works council, which would give UAW leaders even greater say over plant operations than a traditional American union contract, possibly including union representatives on the company’s board. And it may be enough to sway at least some of the plant workers who had previously been skeptical of the UAW’s overtures.
There is a reason King keeps failing—workers instinctively know unionization means the death of jobs. As Reuters reports, in the past three decades nearly every job lost at US car factories have vanished from unionized companies; meanwhile, job gains have come almost exclusively from non-union companies.
Unfortunately for King, kill the company, kill the union. At its peak in 1979, the UAW boasted a membership of 1.5 million. Today, by its own admission it boasts a mere 390,000. In the last 12 years, the Detroit-based auto companies have shed 200,000 jobs—three-fifths of its hourly workforce. Meanwhile, foreign-owned car companies have created some 20,000 new jobs in mostly southern factories.
And so the UAW’s only hope is to find a new host. The Chattanooga Volkswagen plant must appear a robust specimen. The Volkswagen Passat won the 2012 Motor Trend Car of the Year award (which judges models on a variety of value and safety criteria), propelling it to sales of over 117,000 that year alone.
No wonder the Passat, and the Volkswagen plant that manufactures it, has attracted gleam-filled gaze from the north. But if the UAW gets its way, it could do for the foreign auto makers exactly what it has done to the once great American car industry.
Increase costs, decrease quality. Kill jobs.