Retreat at VW now may help UAW later

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It's never easy for a labor union to walk away from a fight, but for the UAW, surrender offered a way to salvage a long-term opportunity from the wreckage of Chattanooga.

Last week, the UAW abandoned its appeal of a narrow loss in the February unionization vote at Volks- wagen's Chattanooga assembly plant. That loss was crushing for the UAW, which has long struggled to organize foreign-owned assembly plants in the South and saw Volks-wagen as an ideal target because of Germany's strong labor movement. In its appeal, it accused anti-union politicians of improperly interfering with the election.

But the UAW is moving on -- for now -- and recording its loss as a first strike, rather than a third out. "The UAW is ready to put February's tainted election in the rearview mirror," a union statement said, "and instead focus on advocating for new jobs and economic investment in Chattanooga."

It was a sign that UAW President Bob King, who has favored strategy over bluster throughout his four-year tenure, is looking a few moves ahead in this chess match. By withdrawing the appeal, King aimed to drive home the message that the union is looking out for U.S. workers, not just its membership rolls.

VW is on the verge of a decision on expanding the Chattanooga plant to build a new crossover for the United States. Because the expansion hinges on subsidy talks with union-averse Tennessee politicians, such as Gov. Bill Haslam and U.S. Sen. Bob Corker, there was a real possibility the UAW's appeal could delay the investment or even prompt VW to build the crossover in Mexico instead.

"It was going to be problematic for Volkswagen if the UAW continued with this appeal," said Erik Loomis, a labor historian at the University of Rhode Island who has written about the UAW campaign in Chattanooga. "The UAW wants to be seen as Volkswagen's friend, and Bob King seems to think that's going to be the ticket to ultimately organize the plant."

Now that the appeal has been withdrawn, the onus for securing the crossover shifts to Tennessee. If the production order goes to Mexico instead of Chattanooga, state politicians, not the UAW, would be in line for the blame.

"Tactically, it was a good move for them to make in this situation," said Maury Nicely, a Chattanooga lawyer who argued against the UAW's appeal for the anti-union group Southern Momentum.

The UAW's surrender surprised both supporters and opponents, and at first blush, didn't make much sense. The union would have had a shot at redemption if the National Labor Relations Board ordered a fresh vote. All it stood to lose was legal fees.

But the chances that the UAW would win its appeal and a second election were slim. And because the NLRB would need to intervene for the union to prevail, the case "was not going to provide the kind of victory the UAW ultimately wanted," Loomis said.

King moved quickly to pre-empt charges of cowardice from union backers. One of his first moves was speaking to ThinkProgress, which is affiliated with the liberal Center for American Progress and holds outsize influence in left-wing circles. "We're not quitting at all," King told the news site. "We're very committed."

Indeed, pulling the appeal does not bar the UAW from trying again in Chattanooga, which remains its best shot at organizing a foreign-owned Southern plant.

VW has concluded it needs cooperation from an outside union such as the UAW to set up the German-style works council it wants in Chattanooga.

The results from February's vote were certified last week, so the UAW must wait only a year to call a new vote. Even if it can't win a majority, it may explore other options, such as setting up a "minority union" that would represent its members only, rather than the plant's entire work force.

King's likely successor, UAW Secretary-Treasurer Dennis Williams, made clear on the night of the Chattanooga defeat that he will keep up the fight. "It took seven years to organize Ford," he told reporters then, "and I will be around for at least another five."

In the meantime, VW and Tennessee will have their own issues.

Tennessee officials offered $300 million during the organizing drive to help VW expand the Chattanooga plant to build the crossover, on the condition that union talks were completed in a "satisfactory" manner, leaked documents show.

When the UAW withdrew its appeal, the union called upon Tennessee officials to again offer the tax incentives. "They need to step up and do what's right for VW and those workers over there: Get the incentives without any strings attached," Gary Casteel, director of the UAW's Tennessee-based Region 8, told the Associated Press.

Nicely said that now that the appeal has been withdrawn, Tennessee politicians should have enough resolution to advance the subsidies. He said it would be "problematic" under U.S. law to make them contingent on the outcome of future union talks.

Tennessee politicians, for their part, are going back to the bargaining table. In a statement last week, Corker dismissed the union's appeal as "nothing more than a sideshow" to distract from February's humiliating election loss.

"It's a shame the UAW slowed the momentum on our expansion conversations with Volkswagen," he said, "but now it's time for VW, our state and our community to re-engage and move forward with bringing additional jobs to Chattanooga."

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


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