In February of this year, the UAW lost a vote among the 1,550 employees at the VW plant in Chattanooga, TN which would have established a union and a works council. Tennessee is a right-to-work state, so no employee could be forced to join the union, thus the works council would have represented both unionized and non-unionized workers to management. These works councils are common in Germany, which motivated VW to bring in the UAW so they could create one in the U.S.
The loss was a tough pill to swallow for the UAW who was hoping to establish the first unionized foreign car manufacturing facility in a southern state. The union claimed after the loss that anti-union politicians such as Sen. Bob Corker influenced the vote. An Automotive Weekly article, however, suggests that the “win” for Tennessee politicians may in fact backfire. VW is closing in on a decision about whether or not to expand the facility in Chattanooga to produce a new crossover for the United States. This decision, however, will depend on subsidy discussions with anti-union Tennessee politicians and it is possible that VW will decide to locate this new production facility in Mexico where a works council would be possible. The UAW could easily point the finger at Corker and other Tennessee politicians if this were to happen.
VW is rare in its affinity for unions. A Wall Street Journal article claims that foreign manufacturers Daimler AG and Nissan Motor Co. are far more hostile to unionization in their American plants. VW seems chiefly motivated by attempts to streamline its labor relations on a global scale. In Germany, they have a strong relationship with the union IG Metall and have developed a relationship that works for them. Carrying this over into the US, however, has proved difficult. Recently, anti-union sentiment has dominated American politics from Wisconsin’s governor Scott Walker who successfully took on public sector unions to Indiana and Michigan which recently passed right-to-work legislation. The affect of this legislation is debatable, but its proliferation points to rapidly changing sentiments towards unions in these traditional manufacturing states.
Source: http://www.autonews.com/article/20140428/OEM01/304289967/retreat-at-vw-now-may-help-uaw-later
Source: http://online.wsj.com/news/articles/SB10001424052702304434104579382541226307368
It is interesting to read how the foreign car manufacturers are against unionization in their US plants, especially after our visit to Metalsa. In Metalsa, also a foreign company (Mexico) producing in the US, they encouraged their workers to join the union, and they said that there has not been any significant increase in costs, that in fact some of their costs had been reduced after unionization.
I am not particularly surprised by the anti-unionization efforts of most of these European firms with regards to their US plant (VW excluded). Europe is known for having significantly higher structural unemployment, due in part to the immense amount of industries that are heavily unionized. The large number of unions also drive up labor costs, which can eat into companies profits or even core business margins. This is why the southeastern US with its history of right to work laws and anti-union sentiment has seen a large number of foreign manufacturers investing in plants in the region.