VW on delicate stance with its German union over US plant representation image

Volkswagen AG is currently performing a delicate dance with its influential German union as it wrestles with the possible representation of workers at the company’s plant in Tennessee.

Volkswagen is trying to introduce its model of a German-style works council, which would help set work rules for white- and blue-collar workers, at its only U.S. plant, in Chattanooga. While it has works councils at all of its plants outside of China and Tennessee, it faces challenges in forming one in Chattanooga for various reasons, including a split within the company over whether to support the United Auto Workers union.

IG Metall, the German union with seats and influence in VW’s boardroom, is pressing the company to establish a works council at Chattanooga. IG Metall also supports the UAW’s bid to organize the U.S. plant.

It is IG Metall’s influence and the company’s need to keep labor peace in Germany that has Volkswagen’s U.S. officials careful not to misstep. At the same time, they also are trying to maintain good relations with Tennessee’s politicians, led by anti-UAW Governor Bill Haslam and U.S. Senator Bob Corker, both Republicans, who oppose the UAW involvement.

In China, VW plants are jointly owned with Chinese partners, making the Chattanooga plant, opened in 2011, the company’s only wholly owned plant without a works council.

Volkswagen cannot institute just a works council in Tennessee because U.S. labor law does not allow for company-sponsored unions. In order to set up a works council for the 1,570 hourly paid manufacturing workers at Chattanooga, a U.S. union needs to be involved, because a foreign-based union cannot represent U.S. workers.

While Jonathan Browning, VW’s top U.S. executive, said last week that the company is in favor of establishing a German-style works council at the plant, he stopped well short of showing any support for the UAW.

“Our strong desire is to have a works council present in Chattanooga,” Browning, Volkswagen Group of America’s president and CEO, said in an interview at the Los Angeles Auto Show. “The challenge in a U.S. context is how to bring that into being.”

Ultimately, VW’s management board will decide whether to allow a works council at Chattanooga working with the UAW or another U.S. labor union. Browning last week said it was up to the Chattanooga workers to vote on union representation. By noting that union representation is up to the workers, he sidesteps the issue of public support or opposition to the UAW.

Also, while VW officials have officially denied it, there is a widely held belief by IG Metall leaders and the UAW that Volkswagen placed the plant in Tennessee in order to keep the UAW out.

Via Reuters