By any reasonable assessment, the odds are against the United Auto Workers. But the union is going ahead anyway with its effort to nullify a vote by Volkswagen assembly plant workers in Chattanooga, Tenn. to reject UAW representation. On Friday, February 21, only hours before expiration of the seven-day deadline, the union filed an appeal with the National Labor Relations Board (NLRB) to overturn the election, decided by a 712-to-626 margin. The outcome was a bitter pill to swallow. A victory would have served as a springboard for organizing drives at foreign-owned auto plants elsewhere in the South. Union officials attribute the result to “a coordinated and widely publicized coercive campaign conducted by politicians and outside organizations.” Yet when subject to scrutiny, this claim of third-party interference doesn’t hold up.
The rejection by Chattanooga workers on February 14 wasn’t the United Auto Workers’ idea of a Valentine’s Day gift. But it didn’t come out of the blue. The $1 billion nonunion plant had been up and running since the spring of 2011. By the close of 2013, more than 250,000 VW Passat sedans had rolled off its main assembly line. Workers as a whole were satisfied with pay, benefits and working conditions. But the UAW, which since the Eighties had hit a wall trying to organize auto plants in the Right to Work South, saw a potential breakthrough. Volkswagen Group headquarters in Wolfsburg, Germany wanted a joint employer-employee works council at the plant, as almost all its other facilities around the world have one. The union vehemently objected to such an arrangement unless it could define council rules on the worker side. Without such control, claimed the union, the group would amount to an illegal “company union.”
Union organizers meanwhile had conducted a card check among plant employees. UAW leaders by early this year asserted they had collected union membership pledge cards from a majority of affected workers. Were it not for a large group of employees desiring to remain nonunion (www.no2uaw.com), Volkswagen likely would have formally recognized the union at that point. But there was evidence that the union used high-pressure tactics to induce signatures. Eight employees, with the help of the National Right to Work Legal Defense Foundation, filed a complaint to that effect with the National Labor Relations Board. Faced with the possibility of a long fight and bad publicity, VW management reluctantly requested a secret ballot election to determine whether the union would represent plant workers. This, in turn, triggered NLRB oversight.
As it turned out, on January 24, the NLRB, with its built-in 3-to-2 pro-union majority, announced: Neither the UAW nor Volkswagen had violated federal labor laws. The ruling was questionable, argued NRTW Legal Defense Foundation President Mark Mix, especially given that nobody had a chance to verify the signatures of any of the pledge cards. But the wheels for an election were now in motion. And the UAW responded with other alternatives to establish an advantage. And it succeeded. On January 27, only 18 days before the election, the union coaxed Volkswagen into signing a neutrality agreement forcing the company to refrain from any public criticism of union representation. The union also persuaded the NLRB to give employees only nine days to state their objections.
But objections weren’t just coming from employees. During the months leading up to February 14, several Tennessee Republican political leaders expressed their disapproval over the possibility of the Chattanooga plant going union. Among them was Senator Bob Corker, who in fact had been mayor of Chattanooga a decade ago and played a central role in persuading Volkswagen to build the plant at the city’s Enterprise South Industrial Park. Shortly before the balloting, he remarked: “Our concern is not with the works council and never has been, and Volkswagen knows that very well…It’s really been the fact that the UAW would be the implementing entity.” Governor Bill Haslam also weighed in, saying UAW representation would be a “negative” for the state’s business climate. And Bo Watson, a state senator from the Chattanooga area, informed VW management that it would have a “very tough time” persuading the legislature to pass tax breaks for plant expansion in the event the union won the election.
After the announcement of the results, the United Auto Workers leadership complained of a “firestorm of interference” from outside sources. The union had seven days to contest the election. And on February 21, with just hours remaining until the midnight deadline, the union filed a complaint with the National Labor Relations Board. Union President Bob King (in photo) explained things this way:
It’s an outrage that politically motivated third parties threatened the economic future of this facility and the opportunity for workers to create a successful operating model that would grow jobs in Tennessee. It is extraordinary interference in the private decision of workers to have a U.S. senator, a governor and leaders of a state legislature threaten the company with the denial of economic incentives and workers with a loss of product.
This statement makes for effective moral theater. Unfortunately, it doesn’t make for sound law or economics. There are a number of reasons why the NLRB shouldn’t be swayed.
First, the UAW is equating the expression of an outside point of view with “interference.” While VW management did sign a neutrality agreement – under duress, one might add – the fact remains that nobody else did. No elected official, in or out of Tennessee, was under any legal obligation to clam up simply because he or she opposed unionization. Speaking out against unionization, as much as speaking out in favor of it, is a right of free speech. So long as opponents did not use force or deception, they were within their rights. The union has mounted no evidence of either. The UAW’s case appears to rest on the morbid fear that some undecided Chattanooga plant workers would be convinced that comments by Senator Corker and other opponents were sensible. Well…too bad. Outsiders also included union supporters. Consider the following Letter to the Editor appearing in the February 12 Chattanooga Times – the day balloting began – by first-term Clinton-era Labor Secretary Robert Reich; former Secretary Reich even reprinted this piece on his Facebook page. He wrote:
I strongly support Chattanooga’s Volkswagen workers who are seeking to unionize in order to get better conditions and wages – just like their counterparts in Germany.
The rights of workers to organize and work together for better wages, safer working conditions and improved benefits has been under consistent attack in the United States for decades. This war on workers’ rights is an assault on the middle class and it is undermining the American economy.
While Wall Street is enjoying record profits, working families can’t get back on their feet until American workers have more money in their pockets to buy what they produce. Unions are the only way to give them the bargaining power to get better pay.
This clichéd, overheated correspondence could have come from an AFL-CIO press release. More importantly, it constituted “interference” by the UAW’s definition. Yet the union somehow didn’t object. Nor did it object when President Obama himself expressed support for the union.
Second, the union is on weak ground in treating a possible denial of additional tax incentives for future plant expansion as though it were political blackmail. A public subsidy, whether in the form of a grant, low-interest loan or tax abatement, is not a right. Volkswagen already had received nearly $600 million in combined federal, state and local tax breaks and other aid to build the Chattanooga facility. Yet even if it had received nothing, that wouldn’t have created an entitlement in the future. For decades, tax breaks have been a common tool of state and local economic development policy. When a company receives favorable treatment, it does so with an implicit understanding that the aid is making possible more jobs than otherwise would have the case. Senator Bo Watson’s comment wasn’t a threat. It simply was a realistic assessment of the likelihood of state lawmakers granting further advantages in the event the plant becomes tethered to union demands.
Third, the UAW is focused on building its institutional stature. Union officials are concerned about the welfare of Chattanooga assembly plant workers only insofar as a majority would join. Unable to win that majority through what appeared to some as an aggressive and deceptive card check, the union reluctantly went ahead and accepted an NLRB-supervised secret ballot election process. The accusation that workers were threatened with the “loss of product” by the words of union opponents on the outside is far-fetched. The Chattanooga VW plant is a smashing success story. How would continuing its nonunion status threaten anyone’s job security? As for the formation of a German-style works council to adjudicate potential labor-management grievances, employees were not against it. What they opposed was the union becoming the workers’ official voice on that council. Senator Corker said as much on February 21 in the wake of the announcement of the union’s appeal: “This complaint affirms the point many of us have been making – that the UAW is only interested in its own survival and not the interests of the great employees at Chattanooga’s Volkswagen facility nor the company for which they work.” It’s worth noting, once again, that without Corker’s efforts as Chattanooga mayor, that plant most likely never would have been built.
The National Labor Relations Board, itself in a state of legal and political turmoil these past several years, will probably take several months to render a decision. It’s hard to see how the United Auto Workers has a case for nullifying the February 14 election. The undue political interference alleged by the union amounts to nothing more than an exercise of the same free speech rights available to union supporters. The union pulled out all the stops to win this election, and came up short. In union democracy, like the political democracy it was set up to mimic, the majority rules. Bob King and other UAW leaders can’t seem to accept that fact when they’re on the losing side.