Labor

Volkswagen's Tennessee Plant Might Get a Quasi-Union After All


An employees at the Volkswagen plant in Chattanooga, Tennessee works on a Passat sedan on July 31, 2012

Photograph by Erik Schelzig/AP Photo

An employees at the Volkswagen plant in Chattanooga, Tennessee works on a Passat sedan on July 31, 2012

Five months after Volkswagen’s Tennessee employees rejected its presence, the United Auto Workers plans to open a local office at the Chattanooga sedan plant to build membership and work with the automaker.

Joining the UAW would be voluntary, according to the plan, but the company could choose to work with the union if it gained enough membership. That could eventually lead to the establishment of a German-style “works council” that Volkswagen has long sought in at the Chattanooga plant, which produces Passat sedans.

Volkswagen said it has no agreement with the UAW and was not participating in a union press conference later Thursday. “Just like anywhere else in the world, the establishment of a local organization is a matter for the trade union concerned. There is no contract or other formal agreement with UAW on this matter,” the company said in a statement ahead of the press conference, declining further comment. A spokesman for Tennessee Gov. Bill Haslam, one of the staunchest opponents of unionization at the plant, also noted that the UAW and Volkswagen had no agreements.

The UAW lost a hotly-contested referendum in February by just 86 votes after state officials and U.S. Sen. Bob Corker—a former Chattanooga mayor—lobbied vigorously against the union. Opponents said the union’s presence at the plant, although not a problem for Volkswagen, would cost Tennessee future jobs as other companies avoided the state.

Works councils are common across German industry and represent workers in planning discussions with management. Every other VW plant in the world, aside from those in China and the U.S., has such a council. After the February vote, officials with the Volkswagen works council in Germany said they would continue to pursue the same structure in America, which the company considers a key competitive strategy in terms of aligning management and employees around company goals.

Bachman is an associate editor for Businessweek.com.

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