Chattanooga’s union blues

By John Lloyd
February 18, 2014

Last Friday, the workers in a Volkswagen plant in Chattanooga, Tennessee voted 712 to 626 — 89 percent of the eligible workforce — against joining the United Auto Workers after the UAW had spent two years attempting to organize there. The result is larger than the effect on the union or the company. This vote has global importance.

Unions are under pressure all over the western world, battered by a quartet of forces: technological change, a shift away from manufacturing, cuts in the public sector where unions are strongest and, in the past five years, recession. The ties that once bound unions tightly to labor and social democratic parties, especially in Europe, are loosening as both sides sour on the other. Neither can deliver the historic support they once did.

In the U.S. and elsewhere, the postwar consensus that unions were good or at least should be allowed to exist and grow has ended. In Chattanooga, a range of individuals and groups campaigned for a workforce dismissal of the UAW’s bid to represent the workers. One of these, the city’s former mayor and now Tennessee Republican Senator Bob Corker, employed what BloombergBusinessweek has called “borderline dishonesty” in claiming, as the vote began, that a “no” vote would guarantee a new SUV model coming to be built in the plant. This was contradicted rapidly by Frank Fischer, the plant’s CEO, who said no such linkage existed.

The Democrats, mindful of their strong union connections and support, were angered by the intervention from the Right. President Barack Obama, speaking at a closed meeting of Democratic lawmakers in Maryland, reportedly accused the union’s opponents of being “more concerned about German shareholders than American workers.”

The plant, with $1 billion of investment for a capacity of 150,000 vehicles a year, makes the Passat, a vehicle tailored to the demands of the U.S. market. Detroit has been humbled since the VW first sold its iconic Beetle to Americans in the 1960s. Since then, General Motors and Chrysler have downsized dramatically. Today the Big Three are making profits again, but most are made outside of the Motor City, which is running a $1 million per day deficit and has become a symbol of urban decay.

Car production has moved or is moving to lower-cost locations like Mexico, China and America’s southern states. Foreign car companies also go to the American South, in part because of the low unionization rates there. Nissan has a plant with 7,000 workers at Smyrna, also in Tennessee, where it makes its successful electric-powered Leaf.

The UAW, now with a workers’ rejection against it, faces a tough struggle to unionize other plants in the South. The union has recently shifted its organizing efforts to a Daimler plant in Vance, Alabama. Its leadership has bitterly criticized Republican politicians and right wing organizations that have campaigned for a rejection of union organization.

Complaints by the UAW that scare tactics were used to prevent workers from voting have some basis, but several workers publicly welcomed the result of the vote. Mike Burton, the worker who led the anti-union group, said that “We don’t need the UAW to give us rights we already have. We can already talk to the company if we have any problems.”

That’s discouraging for a union that has seen its membership plummet to less than 400,000 from 1.5 million, with small gains in the last few years.

Unions are under pressure all over the western world, battered by a quartet of forces: technological change, a shift away from manufacturing, cuts in the public sector where unions are strongest and, in the past five years, recession. The ties that once bound unions tightly to labor and social democratic parties, especially in Europe, are loosening as both sides sour on the other. Neither can deliver the historic support they once did.

In Spain and in Greece, the two European countries that were hit the hardest by recession, the unions have suffered losses in membership and have seen their left-of-center political allies – Pasok in Greece and the Socialist Workers’ Party in Spain – reduced to powerlessness in opposition.

The union confederations in France, with small memberships and safeguards to their status and income, have blocked most initiatives to diminish their power. They seem set to do so again, as President Francois Hollande will introduce a “responsibility pact” that will allow employers to make lower social security payments if they create jobs. The unions, ignoring the carrot of jobs, have balked at the idea of lower social security payments, which they say will mean cuts to social spending.

The UK’s Labour Party leader, Ed Miliband, proposed that union members who pay the political levy to the party should have the right to decide on policy issues, rather than have their leadership do it for them. This has already roused union leaders to angry denunciation and decisions to cut the amount of money they give to the party, but Miliband is looking to the middle class, whose votes he will need in the next election to win.

In all of these examples, unions have adopted strategies of fighting to keep what they have in political power and in the workplace. They have reacted to cuts in jobs and social services with strikes and demonstrations and have blamed employers and governments for their plight.

German companies like VW have for decades created works councils and supervisory boards on which the unions have representatives who receive the same information and vote on the same issues as management. They are deliberately tied into the future viability of the company in which their members work. It is a strategy that doesn’t preclude industrial action or a strong attachment to Germany’s Social Democratic Party, but it has seen wage demands minimize or disappear when times are bad. Unsurprisingly, the management at Chattanooga proposed a works council immediately after the union lost the vote.

Unions in Sweden have roughly the same model; one that attracts the praise of the employers and has kept union membership at just under 70 percent – three or four times the rate in most other developed states.

Neither of these models is perfect. In Germany, those outside of the unionized sector often suffer from low pay and much less secure conditions of work. But it has been a big factor in keeping the country and its companies humming.

In the U.S., there is no other way for big labor to go if it is to survive. For decades, the militant leadership in many European countries has been able to generate some success in raising wages and protecting jobs and social services. In a recession, that’s less the case. The Chattanooga vote is not necessarily a disaster for labor — only for a certain kind of union organization. It is time to regroup and to preserve jobs, earnings and power by taking on corporate responsibility.

PHOTO: United Auto Workers (UAW) President Bob King answers questions during a press conference at the Chattanooga Electrical Apprenticeship and Training Center after the announcement that UAW lost its bid to represent the 1,550 blue-collar workers at Volkswagen AG’s plant in Chattanooga, Tennessee February 14, 2014. REUTERS/Christopher Aluka Berry 

Comments
2 comments so far

Without debating whether or not a union would be appropriate for these workers, it is clear that one particular union, the UAW, was rejected. The UAW model of treating the company as the enemy is not in the workers’ long term interest.

Posted by QuietThinker | Report as abusive

I think it’s time to recognize that in America the Republican Party is now completely hostile to the existence of unions. This is the logical endpoint of an extreme conservative ideology and mindset that makes no room for nuance, balance, or compromise.

Posted by delta5297 | Report as abusive
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