Economy, Regs, & Taxes

Volkswagen Rejects UAW

Feb. 17, 2014

The United Auto Workers effort to unionize the Volkswagen plant in Chattanooga is viewed as a bellwether for the UAW’s future in the South. Most Southern states are “right-to-work states” where workers cannot be forced to join a union. Thus, unions don’t have the grip on manufacturing that they do in the North and Midwest. Fortunately, Chattanooga Volkswagen workers rejected the union on a 712-626 secret ballot vote.

Make no mistake – this was a huge and welcome defeat for the UAW. The union pushed hard because it has shriveled to roughly a quarter of its once-mighty membership, and it wants to expand into the South where many automakers have set up non-union factories. Additionally, the defeat came as even Volkswagen management didn’t exactly oppose unionization because of the influence on its board of the powerful German steelworkers' union, IG Metall. Plant management reportedly allowed the union access to the assembly floor to lobby workers while denying the same privilege to opponents.

As The Wall Street Journal wrote, “[I]t’s nothing short of remarkable that the union couldn’t make the sale. The failure reflects how well the plant’s workers are doing without a union, to the tune of $27 an hour including benefits. The defeat also speaks to the harm the UAW has done to itself by driving GM and Chrysler to bankruptcy and pushing companies like Caterpillar to move new production from union plants.” The UAW may blame politicians like Sen. Bob Corker (R-TN) and other “outside groups” for the defeat, but many of VW’s workers pointed to the UAW’s history over the last 30 years as more than enough reason to keep it out.

Ever eager to inject himself into the story, Barack Obama used his bully pulpit to criticize the vote, accusing union opponents of being “more concerned about German shareholders than American workers.” Evidently, at least some of those American workers disagree. The bottom line is that the unions including the UAW are largely responsible for the bankrupt wasteland of Detroit. Once proudly known as the Motor City, the whole city is now up on blocks. We’re thankful Chattanooga didn’t go down that road.