At Volkswagen, labor is indeed a full partner
Jesse Snyder is editor of the opinion page at Automotive News
Especially in an election year, I expect political rhetoric over UAW organizing in the South. This month's rejection of the UAW by workers at Volkswagen's Chattanooga plant certainly garnered lots of words on both sides.
But, frankly, I was shocked by two Southern politicians so eager to score points with local conservative voting bases that they insulted half the board members of the automakers whose U.S. plants they so covet.
In Tennessee, Sen. Bob Corker announced on the first day of the Chattanooga voting that he had been "assured" that VW would award a major new product to the plant if workers rejected the UAW. When Frank Fischer, CEO of VW in Chattanooga, said that was untrue, Corker implied that he knew more than Fischer.
Corker may be exulting that he helped thwart the UAW and, as he might put it, preserve Tennessee as a business-friendly state. But he also thwarted VW's effort to install a works council in Chattanooga.
South Carolina has welcomed nonunion jobs, at BMW's Spartanburg plant, for example. But the Detroit 3 should stay out, Gov. Nikki Haley said last week. "We discourage any companies that have unions from wanting to come to South Carolina because we don't want to taint the water."
Both politicians apparently don't know or don't care that both Volkswagen AG and BMW AG -- by German law -- have supervisory boards with half their members from labor unions.
It's right on the BMW Group Web site: "In accordance with the regulations contained in the German co-determination Act, BMW AG's Supervisory Board shall comprise ten shareholder representatives ... and ten employee representatives."
In Germany's two-board corporate structure, what does the supervisory board do? It appoints the management board and has veto power on any decision to open or close plants.
As managing editor of Automotive News Europe, I lived in Germany for five years. Germans take the co-determination act seriously. To them, the law's enforced sharing of power between labor and management is a foundation of their post-war economic miracle -- it's how Germans boot-strapped themselves back to prosperity.
And the poster child, the shiniest example, of co-determination is VW.
VW is about to decide where to build a new SUV in North America. The likeliest scenario: a greatly expanded or new plant in the United States or Mexico.
How did Corker's insistence that he knew VW's intentions better than VW executives go over in Wolfsburg? Not well.
"Another VW factory in the United States, provided that one more should still be set up there, does not necessarily have to be assigned to the South again," said Bernd Osterloh, head of VW's central works council and the de facto labor leader on the supervisory board.
Works councils are already in VW plants all over the world, except Russia, China and Tennessee.
The puzzling part about Haley's remarks is that they weren't provoked. South Carolina won a major auto assembly plant that is not unionized. Why remind BMW board members of that? And why say aloud that labor unions "taint the water"?
Frankly, it's unfair to auto workers in Spartanburg and Chattanooga. They have earned each scrap of trust and new investment from their parent companies through diligence and hard work. They deserve better than for their home state politicos to interfere with the internal operations of their businesses.
You can reach Jesse Snyder at email@example.com.