UAW Edges Toward First Toehold in South - Majority of VW Factory's Tennessee Workers Have Signaled Support for Union

From The Wall Street Journal:

The United Auto Workers union, after suffering years of declining membership and power in Detroit, is moving closer to what could be an unlikely and historic win: organizing its first foreign-owned auto plant in the U.S. South.

UAW President Bob King said on Friday he is confident a Volkswagen AG plant in Tennessee will be unionized, and is hoping the auto maker will accept the UAW as bargaining partner for the plant's 2,000 assembly workers.

If the UAW succeeds in Chattanooga, it would be a dramatic turn for the South, which has long resisted organized labor and has used its antiunion stance to attract several foreign-owned auto makers.

In the 1990s, Japanese and German car makers began opening factories in the South, far from UAW strongholds in Michigan and Ohio. There, they had the backing of right-to-work laws, which allow workers to refuse to pay union dues where one exists, and could pay starting wages between $12 and $16 an hour—well below prevailing UAW wages at the time.

Today, Alabama is home to plants owned by Daimler AG,  Honda Motor Co.,  Toyota Motor Corp.  and Korea's Hyundai Motor Co.,  BMW AG has a plant in South Carolina. Nissan Motor Co.  operates factories in Mississippi, and another in Smyna, Tenn., 115 miles northwest of Chattanooga.

Those plants have brought thousands of skilled jobs to states that once had a hard time attracting manufacturers, and created a network of auto-parts and related companies that now employ 10s of thousands of production workers. Volkswagen's Chattanooga plant employs more than 2,400 people in total. A University of Tennessee study found 10,000 jobs were indirectly created by the plant.

Today's wages at UAW-represented and nonunion plants also are similar. Starting pay for VW workers today is about $14.50 an hour, rising to $19.50 over three years. New hires at UAW-represented companies start at $15.78, and can have their wages rise to $19.28 an hour over four years. Veteran UAW workers at General Motors Co., Ford Motor Co. and Chrysler Group LLC earn about $28 an hour.

The UAW has tried organizing Southern car plants without success. The union has managed to unionize some southern factories that make auto parts. But it has suffered setbacks, too. In July, the UAW said a majority of workers at a parts plant in Tuscaloosa, Ala., had signed cards supporting the union. However, a majority later rejected the UAW in a secret-ballot vote.

The UAW's drive to organize VW's Chattanooga plant comes in the wake of a layoff of 500 contract workers earlier this year. In 2012, VW added the workers as a third crew to boost production of its Passat sedan. But sales of the Passat this year have grown much slower than VW expected, and the 500 contract workers were dismissed earlier this year after less than a year on the job.

If VW chooses not to recognize the UAW, the union could still seek certification by the National Labor Relations Board, Mr. King said, because UAW organizers believe they have collected signed union cards from more than half of the Chattanooga plant's production workers. If the card collection is verified, the NLRB could name the UAW the official representative of the plant's workers. It could then enter into negotiations on a contract.

"Volkswagen is a great company and they really believe worker representation is part of their success," Mr. King said. "I'm sure we'll sit down with them and talk about what's the best path."

Representation by the UAW isn't assured, however. Volkswagen management could push to have a secret ballot vote on whether workers want the UAW to represent them, similar to the Alabama auto parts maker.

"The only true way to find out where the [workers] lie is a secret ballot," said Don Jackson, a former executive at the plant who lives in the Chattanooga area and remains in contact with management and workers at the plant. "I see them in the community, at church, and people tell me all the time they don't want the union," he said.

Jonathan Walden, a worker at the plant who helped collect signed union cards, acknowledged that some colleagues oppose the UAW. "But I do know that a majority, an absolute majority, want to see this happen," he said in a telephone interview arranged by the UAW.

A spokesman for Volkswagen declined to comment.

The UAW is the closest it has ever been to representing U.S. workers at a Southern plant in part because of differences in German and U.S. labor law. In Germany, employees of large companies are represented by works councils. But U.S. law requires companies that have works councils to have workers represented by an outside union.

The situation has resulted in a split within Volkswagen, people in touch with senior executives said. German labor representatives at VW have pushed to create a works council in Chattanooga, to ensure workers there have the same kind of voice as workers in Germany, and VW's senior executives has shown a willingness to discuss the matter with the UAW, these people said.

Mr. King met with VW executives in Germany last week.

But some executives at the Chattanooga plant don't want VW to recognize the union and have become worried by upper management's view, the people familiar with their thinking said. And some politicians, including Tennessee Gov. Bill Haslam and Sen. Bob Corker (R., Tenn.) a former mayor of Chattanooga, have come out in opposition to a union.

This week Sen. Corker said he was surprised Volkswagen entered discussions with the UAW. He added that company executives had told him when they decided to locate a U.S. plant near Chattanooga that they didn't intend to have a relationship with the UAW. Among the executives who expressed this, he said, was the auto maker's chief executive, Martin Winterkorn.

"They agreed on the front end—they would have nothing to do with the UAW," Sen. Corker said.