FALL 2014

54 THE DISTRIBUTOR’S

54 THE DISTRIBUTOR’S LINK Woodruff Imberman An economic historian by training, the author, Dr. Woodruff Imberman, is President of Imberman and DeForest, Inc., management consultants. He has published many articles in Distributor’s Link on improving managerial effectiveness, supervisory training, improving employee productivity, and on implementing Gainsharing Plans in the fastener industry. For further information on these subjects and the articles, please contact him at Imberman and DeForest, Inc., IMBandDEF@aol.com. WHAT THE UAW ELECTION AT VOLKSWAGEN MEANS FOR THE FASTENER INDUSTRY There are seven lessons fastener producers and distributors wanting good employee relations, labor peace and high productivity can learn from the United Auto Workers’ complicated but ultimately unsuccessful organizing drive at Volkswagen’s Chattanooga, TN plant last February. The UAW’s had a four-step strategy. It was complicated -- but creative. It involved pressuring Volkswagen's management in Germany to help the American union's Tennessee organizing effort; creating a new, cooperative image for itself; using that image to unionize the Chattanooga plant and then using it as a spring-board to organize the other “transplant” Southern facilities of foreign auto makers: • First, it co-opted powerful German unions to pressure Volkswagen into supporting its organizing efforts in Tennessee by saying it would follow practices mandated by German law in the Chattanooga plant and then persuading VW to agree to a simple “cardcheck” method to obtain bargaining rights in Tennessee rather than having employee sentiment verified by a secret-ballot election; • Second, it tried to gain employee acceptance in Chattanooga by pledging to cooperate with rather than fight VW’s local management; • Third, by offering its new, positive image of labor/management cooperation to the Chattanooga workers, it hoped to negate its reputation as a militant union that one of the causes of the American auto industry's downfall; • And finally, it hoped a success in VW/Chattanooga would reverse the union’s long-term decline and help it organize the foreign “transplant” car company plants throughout the South where employees have wanted little to do with unions in general and the Auto Workers in particular. The reasons for the UAW’s defeat in Tennessee include the Chattanooga workers’ negative perceptions of VW; the difficulty of trying to apply the German industrial practices and laws in the United States; the historic adversarial stance of unions in this country, and a widespread but erroneous interpretation of American labor law. The best way to understand the UAW’s ingenious approach to the Chattanooga election and then learn from it is via a question and answer approach to the entire complex matter: Why Was It So Important To The UAW To Organize VW’s Chattanooga Plant Membership in the United Auto Workers Union has fallen to about 400,000 members, down by more than two-thirds half since it peaked in 1979. 1 Desperate to organize new members, it has been trying to unionize the growth segment of the industry -- the “transplant” assembly plants of foreign auto makers – Nissan, BMW, Volkswagen, Toyota, and the others. 2 The UAW has been unsuccessful, for several reasons. What Were The German Laws And Industrial Practices The UAW’s strategy in Volkswagen/Tennessee was based upon applying German labor law which requires all companies to have a "Works Council" in each facility. Like earlier German social legislation, 3 this 1919 law was a conservative effort to blunt the Bolshevik movement then threatening Eastern Europe. 4 Briefly put, a Workers Council represents workers at a local level in German plants, while national unions there traditionally have negotiated industry-wide contracts applying to all companies within specific industries. Local Works Councils have more power in Germany to raise grievances than do union locals in the United States, and often work in uneasy tension with Germany's national unions. please turn to page 214