Top executives at Volkswagen AG started high-level negotiations with the UAW on Friday on how the union might represent workers at VW's assembly plant in Chattanooga, a German newspaper reported today.
According to a report in Handelsblatt, UAW President Bob King met with Horst Neumann, the board member for human resources at VW, during a meeting that started Friday at the automaker's corporate headquarters in Wolfsburg, Germany.
Citing anonymous sources, the newspaper reports that they discussed setting up a German-style "works council" to represent workers at the Chattanooga plant.
The UAW and VW declined to comment on the report.
VW takes pride in its works council model, in which blue-collar and white-collar workers all vote for plant-level representatives who decide working conditions in tandem with executives.
Those councils also elect the members of a global works council that has a say in major business decisions -- like whether to build a new assembly plant, which products to launch, and where to build them.
Top executives say that in order to start a works council in Chattanooga -- which is the only VW assembly plant worldwide without one -- an outside union like the UAW is needed to satisfy U.S. labor law.
"The UAW would be the natural partner," Neumann said in March, noting the UAW's ties to IG Metall, the union that represents most VW workers in Germany.
"We are not obliged to do it," he added. "It will depend on the negotiations."
Bernd Osterloh, the head of the global works council that represents all other VW assembly plants in the world, also attended the most recent talks with the UAW, according to Handelsblatt.
The talks, which have aroused political fervor on both sides of the Atlantic, come as top VW executives mull a possible expansion of the $1 billion Tennessee plant, which is a cornerstone of VW's grand ambitions in the United States.
The plant has a current production capacity of 150,000 vehicles per year, but with additional investments and products, that number could eventually rise to 500,000 vehicles.
VW is now reviewing the business case for a mid-sized SUV modeled after the seven-seat CrossBlue, a concept shown at the Detroit auto show earlier this year.
Tennessee politicians desperately want to attract more investment in the plant, which now employs about 2,700 workers and is competing against Mexico for the privilege of building a new SUV. Many are Republicans and are staunchly opposed to the UAW.
Critics argue that the union's bargaining style is partly to blame for the recent struggles of Detroit's automakers. One anti-union group, the Competitive Enterprise Institute, paid in June to put up a billboard off a major highway near the plant.
"Auto unions ate Detroit," the billboard said. "Next meal Chattanooga?"
'Foot in the door'
The union push is of huge importance to the UAW, which has long struggled to organize foreign-owned assembly plants.
Since becoming president in 2010, King has targeted a non-union Mercedes-Benz plant in Vance, Ala., and Nissan assembly plants in Smyrna, Tenn., and Canton, Miss. The UAW has not organized any of them under his watch, but experts say a victory in Chattanooga could help, by providing a template for a new style of labor relations.
"I don't see it as a renaissance that will bring the U.S. labor movement back," said Steve Silvia, a professor and labor expert at American University in Washington, D.C. "But seeing whether they can get their foot in the door -- that might work. And given the plight of the U.S. labor movement, they don't have too many other cards to play. So they might as well play this one."
Plant employees who back the UAW organizing drive have been collecting signed cards of support for well over a year. The UAW has not said whether it has cards from a majority of employees, which would bolster the union's case in asking VW for legal recognition.
VW has maintained that employees will decide how they will be represented, and the company has not distanced itself from the UAW.
The two of them have jointly scheduled an event this Saturday at Lake Winnepesaukah Amusement Park in nearby Rossville, Ga. They have offered 2,000 free tickets to VW employees and family members for the event, which will be open to both union supporters and opponents.
Long history
Volkswagen AG has a history with the UAW, which represented the workers at the automaker's first U.S. factory -- the shuttered Westmoreland plant in New Stanton, Pa.
That was the first "transplant" assembly plant to be opened by a foreign automaker in the United States. The UAW represented the workers at that plant, which opened in 1978 and built models such as the Rabbit, GTI and Jetta before closing a decade later.
The main reasons for its struggles were weak products and intense competition from Japanese automakers -- not labor conflicts, former VW executives told Automotive News after the plant shut down.
But today, only one foreign-owned assembly plant in the United States -- a Mitsubishi plant in Normal, Ill. that began as a joint venture with Chrysler -- has a work force represented by the UAW.
Several years ago, when VW decided to set up another U.S. assembly plant to help the company toward its goal of selling 800,000 cars per year in the United States, the company did not embrace the UAW at first.
Many of the foremen and managers hired to run the plant were deeply skeptical of unions.
Among them was Don Jackson, who was president of manufacturing at the Chattanooga plant until last year.
Jackson had worked at non-union Toyota plants in Georgetown, Ky. and San Antonio, Texas before joining Volkswagen in 2008. In a recent interview, Jackson said that he and other supervisors used to hold meetings with VW workers to argue the factory did not need union organizers to mediate between workers and managers.
Those meetings stopped around the time Jackson left the plant, sources say.
Jackson, who has continued to speak publicly against the organizing effort, said the outcome of the talks will have ripple effects across the industry.
"I feel confident that if one German facility goes union," he said, "then it's going to be very difficult for the other German facilities in the U.S. not to go union."
