The United Auto Workers defeat in the Volkswagen representation election has conservatives gloating, even though their victory came only after they abandoned many of their core principles in favor of political expediency. Elected officials who typically denounce government interference in the market used their pulpits to meddle in a private business matter. Editorialists at the Wall Street Journal, who normally sing the praises of large corporations, declared that the vote showed that “workers are smarter than management.”
Such bogus industrial populism is easy to bandy about when the workers in question were pressured into voting against their own best interests. Typically, it is management and anti-union consultants who are responsible for defeating an organizing drive. In Tennessee, the company remained neutral and the intimidation campaign was carried out by politicians and out-of-state conservative ideologues. Leading the assault was U.S. Sen. Bob Corker, who brazenly promoted the apparent lie that a vote for the union would mean that a new VW assembly line for SUVs would be sited in Mexico instead of Chattanooga.
The Journal admitted that Corker may have been “impolitic” but it defended his “right to free speech.” State politicians also did damage, raising the prospect that VW, which got a $554 million subsidy package when it opened the plant, should not expect future financial assistance if the workers dared to choose the union.
The enthusiasm for the wisdom of the rank and file on the part of the Journal stands in stark contrast to its reaction when workers at VW’s original U.S. plant in Westmoreland, Pennsylvania asserted themselves. Frustrated at the low pay rates they were receiving in comparison to their counterparts at the Big Three plants in Detroit, the unionized VW workers staged a wildcat strike in 1978. Stopping production of VW’s Rabbit, the workers rallied under the slogan “No Money, No Bunny.”
A front-page story in the Journal about the strike (10/13/1978) included the following subheadline: “Pennsylvania Walkout Stirs Doubts on Cost, Stability of American Work Force.” The article quoted a Nissan official as saying: “The Volkswagen strike is quite upsetting to us.”
It was also quite upsetting to VW. Even after the walkout ended, labor-management relations remained hostile at the plant. VW, which was also confronted with a lawsuit charging that it discriminated against black employees, shut down the operation in 1988.
It is likely that VW managers had that experience in mind when they decided not to fight the UAW. Southern U.S. conservatives, like other pro-business types, push the notion that American workers need to accept the realities of a globalized market. What those conservatives refuse to recognize is that one of those realities, at least as far as VW is concerned, is an acceptance of unions and a cooperative approach to labor relations through works councils of the kind that the company wants to adopt in Tennessee. In fact, VW, like other German companies, has a supervisory board with labor representatives.
The latest irony in this situation is that Bernd Osterloh, a labor member of VW’s supervisory board and the head of its works council in Germany, reacted to the election results in Tennessee by saying he might block any future investments by VW in the Southern United States because of the hostility to unions. That would demolish the pernicious conventional wisdom that disempowered workers are always an essential ingredient for economic growth.
Osterloh’s statement helps to bring into focus the truth about the progressive deunionization of U.S. business. Rather than being part of an alignment with the realities of globalization, it is making the United States more of an outlier compared to other wealthy nations. Like this country’s refusal to accept the kind of single payer health insurance that is the norm in the developed world, the ongoing attack on unions puts us out of step with the way a modern economy is supposed to operate and reinforces the dangerous growth of economic inequality.