4 key VW decisions shaped UAW vote's course
ANALYSIS

4 key VW decisions shaped vote's course

Workers in Chattanooga started collecting signed cards of support for the UAW in March 2012, and they got almost immediate help from VW.
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CHATTANOOGA -- From Washington to Wolfsburg, the UAW's failed organizing drive made for exciting political theater. But on the grounds of the Volkswagen plant here, it was about as friendly as it gets.

A week before the balloting, Sean Moss, a 45-year-old quality inspector in the assembly shop, stood outside the plant, braving a midwinter chill to hand out anti-union leaflets. Next to him, a line worker handed out fliers in support of the UAW.

"I said to him, 'We should be doing this in July,'" Moss said. "It was so cold. And we just laughed about it."

The odd comity between supporters and opponents of the UAW reflected the way the election and its outcome came to be, born not out of protests or battles on the overpass, but out of a shared objective -- a voice for workers in improving their prospects at the factory -- and a deep disagreement about how to achieve that.

And while the political winds and rhetoric swayed the headlines over the past few weeks, the course of the organizing effort was determined largely by four pivotal decisions by VW executives, beginning nearly two years ago.

VW's distinctive labor relations practices make it difficult for others in the industry to draw broad lessons from the vote, experts say. But the way VW handled those four turning points illustrates the daunting challenge that the UAW will face as it tries to build bridges to workers and companies outside the Detroit 3.

The personnel shuffle


Workers in Chattanooga started collecting signed cards of support for the UAW in March 2012, and they got almost immediate help from VW.

Frank Patta, secretary general of VW's global works council, came to Chattanooga that June and told workers they could gain from having a German-style works council.

"Of course we will support the UAW; we've said that all along," Reuters quoted global council chief Bernd Osterloh as saying at the time. "But there's one thing we cannot do. We can't take workers at VW Chattanooga by the hand when it comes to voting."

That same month, VW announced the retirement of Don Jackson, president of manufacturing at Volkswagen of America. Jackson had joined VW in 2008 from Toyota, where he had just opened the nonunion truck plant in San Antonio. While at VW, he made no secret of his dislike of unions.

"I've been able to work without a third party or a union for over 34 years," Jackson said last year at an anti-UAW gathering in Chattanooga, according to a video recording of the event posted online. "I'm very proud of that. And I believe it's the proven path for our success in the future."

The circumstances around his departure remain unclear. But to UAW friends and foes, the changing of the guard was a sign VW would not resist the union drive.

In January 2013, VW sent another signal by appointing a new head of human resources in Chattanooga. He came from VW's plant in Braunschweig, Germany. His name was Sebastian Patta -- Frank Patta's brother.

A 'natural partner'


The company gave the union drive another boost last year when Horst Neumann, board member for human resources at Volkswagen AG, dropped a bombshell on the U.S. media. VW had concluded a union was needed under U.S. law to set up a works council, Neumann said, and was in talks with the UAW to do it.

The conclusion that a union was needed for the works council was all but dictated by U.S. law, says Steve Silvia, a professor at American University who specializes in labor relations. But the choice to engage with the UAW wasn't so easy. VW could have set up a works council with any union -- even one created by its workers. Yet the company concluded that "the UAW would be the natural partner," as Neumann put it.

After all, from 1978 to 1988, when VW took its first crack at building cars in the United States, in Westmoreland, Pa., the UAW represented the workers.

With this stamp of approval, the UAW campaigned all summer in Chattanooga alongside its German counterpart, IG Metall. One event, held in June at an International Brotherhood of Electrical Workers union hall, drew about 50 people, most of them plant workers and relatives.

UAW President Bob King and Horst Mund, head of IG Metall's international program, spoke as attendees lunched on fried chicken, potato salad and cookies.

"I can tell you today: We're very, very close," UAW Region 8 Director Gary Casteel told workers, saying the question would soon be how, not if, VW would recognize the UAW. Mund urged Chattanooga workers not to be the "odd man out," since VW had works councils at nearly all its global plants.

The next month, workers at the plant crossed an important threshold: They held signed cards in support of the UAW from a majority of eligible workers at the plant.

The secret ballot


At this point, the UAW could have gone straight to the National Labor Relations Board and asked for an election. But the UAW wanted VW to recognize the union based on the card count alone, without an election.

An opportunity arrived on Aug. 30, when executives from Volkswagen AG, the global works council and the UAW met at VW headquarters in Wolfsburg.

But the company, concerned about antagonizing Republican politicians in Tennessee, did not oblige. Days after the meeting, Volkswagen Group of America CEO Jonathan Browning announced that VW would insist upon a "formal vote."

"This way, there would be no question about whether this was snuck in through the back door," Silvia, the American University professor, said. "The employees made the decision -- not the company."

In the lead-up to the election, UAW supporters thought they had 70 to 80 percent of workers on their side, says Justin King, 30, who fixes electronic glitches in cars at the plant and was a key UAW organizer. And yet, when the votes were counted, the UAW ended up losing 53 to 47 percent, with nearly 90 percent turnout.

"That's the absolutely mind-boggling, jaw-dropping thing about that election," says Jefferson Cowie, a labor historian at Cornell University. "It's a chilling signal to the entire labor movement."

The neutrality deal


Volkswagen's caution didn't end with its call for a secret ballot. In preparation for the Feb. 12-14 election, the UAW and VW signed a 22-page "neutrality agreement," dated Jan. 27, giving the UAW permission to speak to workers at the plant before the election.

In exchange for this access, the union made a number of promises, including a vow that if workers voted for the UAW, union negotiators would protect VW's "cost advantages" compared with U.S. rivals.

Critics of the UAW cited this as proof that workers couldn't expect a bump in pay and benefits by aligning with the union.

The deal itself may not have swayed workers; they may not have even known it existed. Yet it underscored one of the UAW's biggest challenges. By pledging cooperation with VW, the union may have undercut exactly what makes it attractive to workers, Cowie says.

People across the U.S. labor movement have scrutinized this decision since the election, suggesting that the emphasis on cooperation between union and management, a hallmark of the German works council model, may be a deeply flawed organizing strategy in the United States.

The wording of the deal suggested that the UAW "didn't have a lot to offer besides the works council," Cowie says. "If they're not going to bargain hard for wages, then what are the workers going to get?"

Under the neutrality deal, the union agreed that if it lost, it would suspend organizing efforts for one year. But this is not the end of the UAW's campaign.

Its hopes rest on winning over more workers like Richard Isbell, a 33-year-old employee in the VW plant's repair shop. Hours before the vote tally was released, Isbell was eager to hear the results -- but it was also Valentine's Day; he was going to take his wife out to dinner and give her a gift certificate for a massage.

The gift certificate cost Isbell $40, about two hours of wages -- the equivalent of a month's UAW dues. This is not pocket change in the Isbell household, so he had to lie to his wife, saying he withdrew the cash for a car stereo.

Isbell said he was willing to join the UAW and pay dues, even if it didn't mean getting a raise. He said he trusts VW when it sings the praises of its works councils.

"I've been working for Volkswagen for almost four years now," Isbell said. "I believe what Volkswagen tells me, because they haven't steered me wrong yet. ... And I want to be part of this works council."

Chattanooga campaign
More than 2 years of organizing led to the UAW election at Volkswagen's U.S. assembly plant.

2011

September: Chattanooga workers have their first formal meeting with the UAW.

2012

March: Workers start gathering signed cards of support for the UAW.

June: Works council member Frank Patta tells Chattanooga workers the council wants them represented but will not pressure them to vote for the UAW.

June: Don Jackson, the plant's union-averse manufacturing boss, retires.

August: Other plant workers start circulating anti-UAW petitions, ultimately getting 600 signatures.

2013

January: VW chooses Patta's brother, Sebastian Patta, as the plant's human resources chief.

March: VW's top global HR executive, Horst Neumann, says talks are under way with the UAW about how to set up a works council in Chattanooga.

July: Workers gathering signed cards at the plant cross the 50% threshold.

August: UAW President Bob King, Neumann and works council leaders meet at VW headquarters in Wolfsburg to discuss how to proceed.

September: VW refuses the UAW's wish to be recognized at the plant on the basis of signed cards and insists on a “formal vote.”

2014

January: VW and UAW sign a 22-page “neutrality agreement” for the election, including a pledge to preserve VW's “cost advantages.”

February: The UAW loses the election, 712-626, with 89% turnout; union petitions National Labor Relations Board for new election, citing outside interference.

You can reach Gabe Nelson at gnelson@crain.com.


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