Month: February 2014

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.

Major employers facing a union organizing drive, particularly in the South, have long relied on small-business owners, elected officials and other conservative voices to mount a counter-attack.

An interesting variation on this theme is taking place in Tennessee, where Volkswagen seems to be welcoming a United Auto Workers organizing effort at its plant in Chattanooga, yet local as well as national anti-union ideologues are on the warpath nonetheless. They are frantically trying to persuade VW workers to reject the union in a secret-ballot vote scheduled later this month. The company reportedly decided not to simply recognize the UAW, which has gotten a majority of the workers to sign membership cards, because of intense pressure from figures such as Tennessee Senator Bob Corker, who gained notoriety for opposing the federal rescue of the auto industry.

(Full disclosure: I am a member of the United Auto Workers via the National Writers Union/UAW Local 1981.)

VW has rejected the usual practice of foreign automakers, which despite any cooperative relationships with unions at home, have embraced American-style anti-union animus in their U.S. transplants. For many years, the UAW has sought to overcome this intransigence, as seen most recently in the ongoing effort to organize the Nissan plant in Canton, Mississippi.

VW wants to import the works council system of labor-management relations it has in Germany, but in the absence of a certified collective bargaining representative, that would amount to an illegal company-dominated union under U.S. labor law.

We thus end up with a situation in which a major corporation wanting to employ a set of practices designed to improve productivity and reduce turnover is being vilified by those who regard union avoidance as one of the grand traditions of the South.

Last month, Stephen Moore, who was recently named chief economist of the Heritage Foundation, told a business meeting in Chattanooga that the union effort at VW is “like inserting a cancer cell into a body. That one cancer cell is going to multiply and kill the body.” Anti-tax crusader Grover Norquist is helping to bankroll the opposition, apparently out of a concern that a union advance in Tennessee would impede his fiscal agenda. The National Right to Work Foundation and the Center for Worker Freedom are also involved, though their efforts fell flat when the National Labor Relations Board concluded that neither the UAW nor VW had violated labor law in any way.

Figures such as Moore and Norquist came into prominence as a result of a conservative backlash that big business set into motion three decades ago in response to advances of the labor, environmental and consumer movements. That Frankenstein monster took on a life of its own, and now rightwing groups pursue purist goals even when they conflict with corporate pragmatism — as seen, for example in the tea party push for a government shutdown over the objection of major companies.

These groups operate on the assumption that Americans are inherently conservative and that organizations such as the UAW will lead them astray. Foreign automakers such as Nissan and Toyota have gone along with this notion.

VW seems to have a different view, but for reasons that are generally not acknowledged. It tends to be forgotten that VW was the first foreign automaker to establish an assembly plant in the United States, back in 1978 in Pennsylvania.

After being welcomed by public officials with a subsidy package worth about $100 million — an astounding sum at the time — Volkswagen found that many of the people it hired were unhappy about being paid less than their counterparts at the  Big Three plants. A wildcat strike ensued, catching even the UAW off guard. Stopping production of VW’s Rabbit, the workers chanted “No Money, No Bunny.” The plant, which never recovered from the worker unrest, shut down in 1988.

As opposed to the rightwing caricature of unions as the shock troops for a socialist takeover, VW regards the UAW as a partner that can help ensure the smooth functioning of the plant. If that’s done by giving workers more control over their working life, so much the better.

After years of being at the totally at the mercy of management, Southern autoworkers finally have a chance to play a greater role in controlling their destiny. That’s real worker freedom.