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Thomas Geoghegan: Will Volkswagen bring a revolution to the South?

By Thomas Geoghegan
Bloomberg View

CHICAGO: As a union-side lawyer, I know many write off the labor movement as lost. But maybe globalization will save us. Consider how the United Auto Workers has come so close to organizing the Volkswagen AG plant in Chattanooga, Tennessee. The UAW may not win immediately, yet something earth-shaking has already happened: a U.S. union opting to push a German company to bring its own model over here.

If that transplant works, then globalization really might save the U.S. labor movement. As pointed out by Harvard University’s Richard Freeman, a leading labor economist, the workplace in countries such as Belgium, Sweden, the Netherlands, Austria, and especially that uber-competitor, Germany, has remained relatively egalitarian. Just count the spread of “works councils” in most of these countries, where workers look through company books and influence decisions.

It’s no accident that these work forces also have a reputation for being higher skilled. Now, the workers of foreign companies doing business in the U.S. are exerting more pressure to introduce their egalitarian model.

It hasn’t been adopted yet, but with help from German workers, that’s what the UAW is daring Volkswagen to do. The union has gone to Volkswagen and said in effect: “We’ll do it your way, with your model.”

Let me, as an old-fashioned labor lawyer, try to explain what a departure this would be.

Volkswagen and the UAW have discussed introducing a European-type works council: a group elected by all the workers (union or not) to participate in and help guide the management of the Tennessee plant. Such a council is in every VW plant around the world except in China — and the U.S. But in the U.S., there is a catch — because the UAW wouldn’t control the works council, Volkswagen would have to first recognize the UAW as the exclusive representative and then enter an agreement in which the union partially gives up that right.

That means the UAW would significantly give up its most precious right — that of being the “exclusive representative” of workers under Section 9 of the Wagner Act. Instead of the UAW bargaining over a range of in-plant issues, a works council elected by all employees — white collar and blue collar — would help run the plant.

At VW headquarters in Wolfsburg, the works council wields enormous power. It can negotiate the start times, shift schedules, staffing, the use of temporary workers, and even determine whether people were properly discharged and promoted. It cannot act unilaterally. But managers can’t either, unless the council agrees. No U.S. union has proposed a system with so much worker control, or corporate democracy, while giving up its claim to be the “exclusive representative.”

So what would the UAW be left to do? It could still bargain over money issues, such as wages, health care and pensions, much as the German unions do.

In the long run, this willingness by the UAW to surrender some of its power will have a huge payoff. First, as Michael Fichter, a labor expert and emeritus professor at the Freie Universitat in Berlin, told me: “It’s a brilliant idea in a right-to-work state. The UAW can come in and say, ‘Look, you aren’t going to give up all your rights to a union. We’re setting up a works council that only you can control.’ ”

At the same time, for Volkswagen to get the necessary agreement with the UAW to put its model in place, it also has to recognize a role for the UAW.

If this advanced form of worker control starts in the non-union South, it would be as explosive as it would be ironic. The spectacle of this kind of power — an enormous amount of worker control without a union being imposed as a wall-to-wall exclusive representative — might turn the world of the South’s workers upside down.

That explains why Volkswagen has come under such pressure from the Tennessee establishment not to recognize the union. True, being Americans, Volkswagen’s local managers hate the idea of unions.

But that’s the least of it. In public, the state’s governor, William Haslam, has said that if the UAW wins, Tennessee is through. U.S. Sen. Bob Corker, who brought Volkswagen into the state as mayor of Chattanooga, told Automotive News that the damage from a UAW victory could last “for generations to come.” It isn’t “just” Volkswagen, according to Corker, but all foreign companies locating in the South that will fall. “Then it’s BMW, then it’s Mercedes, then it’s Nissan, hurting the entire Southeast if they get the momentum.”

Corker and Haslam and Charles and David Koch, the corporate titans who back groups such as the National Right to Work Legal Defense Foundation, have cause to panic. A UAW victory would put on display a de-demonized UAW, not the one the right is used to attacking.

So opponents are trying to force Volkswagen to conduct a secret-ballot election among the Chattanooga plant’s workers on whether they wish to be represented by the UAW. If that happens, well-funded anti-union groups will descend on the “target” population and shriek at VW’s workers until enough of them decide that it is all too much trouble, and trouble isn’t what they want.

Whether that sorry outcome will materialize is still unclear. Talks are ongoing among VW, the UAW, and IG Metall, the union that represents VW workers in Germany. Regardless, that foreign rival model of workplace relations is now out there for U.S. workers to see. Volkswagen even has a Global Works Council — with worker representatives from the Czech Republic, Russia and other countries — which takes part in an extraordinary range of decisions, up to product placement. One day, perhaps even before VW’s Chinese workers join, U.S. workers are going to wonder why they’re still shut out.

Geoghegan is a labor lawyer in Chicago. He is the author, most recently, of Were You Born on the Wrong Continent? He can be reached at


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