Volkswagen and UAW Are Getting Cozier, but Will They Ultimately Match Up?


While his colleagues were getting ready for traditional Labor Day festivities in Detroit, United Auto Workers President Bob King was doing a most untraditional thing: meeting with Volkswagen AG executives in Germany about the company’s plant in Tennessee.

King’s reported session last Friday over VW’s consideration of a new, joint blue- and white-collar advisory “works council” at the plant may be the next step in a very monumental decision for the German brand as it determines the future of its complex in Chattanooga: whether to encourage, allow or at least not resist UAW attempts to organize the plant. For its part, the union has spent 30 years in a fruitless search for victory in its efforts to win representation of workers at foreign-owned car plants in the United States.

For Volkswagen, working with unions is routine in its German operations. So the notion of cooperating with the American auto-workers’ union may not be a particularly huge hurdle either culturally or operationally. Also, the UAW lately has earned a reputation for knocking down shop-floor barriers that used to make running an auto plant way more complicated than it needed to be—and more difficult than for Japanese and Korean carmakers in America that don’t face such work-rule strictures.[more]

VW and the union actually are planning joint sponsorship of a family event on Saturday at an amusement park near Chattanooga with the offer of 2,000 free tickets to VW employees, according to Automotive News. This is one more manifestation of VW’s overall implied stand of neutrality toward the UAW.

But this is still the UAW that, the way many people see it, laid Detroit automakers low with excessive wage demands accompanied by the threat and reality of ruinous strikes, and with iron-shield protection of the most expensive health-insurance and benefits packages in industrial America; the entity that benefited most from the Obama administration’s bailouts of GM and Chrysler in 2009, to the detriment of American taxpayers, bond holders in the companies, and other constituencies; and the organization that still hasn’t been able to get thousands of American workers at foreign “transplants” to trust its intentions after decades of trying.

The UAW also remains staunchly opposed over any aims in Chattanooga by politicians in Tennessee, a conservative redoubt where much of the opposition to the Detroit bailouts was based—and remains. “Auto unions ate Detroit,” said a billboard erected near the VW plant in June by the Competitive Enterprise Institute, based in Washington, D.C., according to the publication. “Next meal Chattanooga?”

In the end, Volkswagen is unlikely to see a lot of damage to its brand in the increasingly important US market by any association with the UAW, which has been tamed in part by a lower wage structure for new auto workers at the Detroit Three, a whack to its “Cadillac” levels of benefits, and by King, an ideologue—but one with a practical flair. GM, Ford and Chrysler have all come back strongly with the UAW in the front seat next to them.