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UAW nears breakthrough in VW organizing push

A unique Volkswagen consumer interactive display that allows potential buyers to spray paint different models in different colors is seen at
A unique Volkswagen consumer interactive display that allows potential buyers to spray paint different models in different colors is seen at

By Ben Klayman and Bernie Woodall

DETROIT (Reuters) - The United Auto Workers union could soon get a big boost in its efforts to represent hourly workers at Volkswagen AG's assembly plant in Chattanooga, Tennessee.

Horst Neumann, VW's board member in charge of human resources, told reporters on Friday that the automaker was in talks with the UAW about setting up a German-style labor board at the Tennessee plant. It was an about-face for a company that has resisted opening the U.S. plant to the UAW.

UAW President Bob King, who has said organizing U.S. plants run by foreign automakers is crucial for the union's survival, welcomed Neumann's comments and the German system where labor has a say in how companies are run.

King described them as "completely consistent with the UAW's 21st century model of unionism" that centers on a less adversarial relationship with companies.

"The UAW is very interested in the specific model that VW wants to present in the months ahead, and we are looking forward to open, fair and respectful dialogue, and cooperation with VW as we have expressed in our vision of the 21st century UAW," he said in a statement.

Neumann said the company may release a plan for the works council labor board in May or June and formal talks with a union could begin as soon as the second half of the year if VW's managing board approves, according to Automotive News and the Detroit News. A VW spokesman confirmed the comments, adding Neumann also said the UAW is not the only option.

If the UAW gains a foothold in VW's Tennessee plant, which opened in 2011 and builds the Passat sedan, it could be a transformative moment, potentially opening the door to representing workers at Mercedes and BMW's U.S. plants.

"This truly represents a breakthrough if it takes place," said Harley Shaiken, a University of California-Berkeley labor studies professor, adding that such an agreement could spread to Japanese and South Korean-owned U.S. plants.

However, federal officials may interpret U.S. labor law as requiring a plant's workers to recognize a union before the German model can be implemented, said Arthur Schwartz, president of Labor and Economics Associates of Ann Arbor, Michigan.

Historically, plants in the American South have been hostile to unions. In 2001, workers at Nissan Motor Co's <7201.T> plant in Smyrna, Tennessee, rejected UAW representation two-to-one.

More than a decade later, King has been eager to show a new UAW has emerged from the wreckage of Detroit and the union can be a better partner with management.

He previously has cited the union's four-year labor contracts with General Motors Co , Ford Motor Co and Chrysler Group LLC in 2011 as an example of the UAW 's flexibility.

In the past, executives at the various German automakers with U.S. plants have declined to discuss the UAW's push to organize their plants. Privately, they have voiced wariness about the union and its confrontational past.

When the UAW restarted efforts to organize foreign-owned U.S. plants, it initially targeted the German automakers because of the supervisory board seats held by labor officials at companies in that country. The UAW has since supported local efforts to organize workers at Nissan's plant in Canton, Mississippi.

King has been keen to foster more cooperation between global trade unions in an increasingly global auto industry. However, officials at the German union IG Metall previously have taken a more hands-off approach to helping the UAW despite not wanting the U.S. market to become a cheap-labor alternative to Germany.

Whether that has changed is not clear, but IG Metall has assisted the UAW before. In 1978, IG Metall helped the UAW organize the first big foreign factory in the United States, VW's Westmoreland Assembly Plant in Pennsylvania.

In that case, IG Metall told VW to look favorably on the UAW's efforts. The message was, "Help them organize, or else," said a former senior VW executive, who asked not to be identified.

In public, VW executives previously noted that workers already took part in corporate decisions, under co-determination policies first enforced by British military officers in Germany after World War Two.

"We have said that we want our employees to have a strong voice in our operations in Chattanooga, based on the social charter of the company, and believe we are operating with those principles," VW U.S. spokesman Tony Cervone said. "We have always said that any choice of formal representation by a union in the U.S. will be based on a vote of the workers at the facility."

In March 2012, the UAW solicited signatures of support from workers at the Chattanooga plant, escalating efforts to establish a foothold outside the U.S. automakers.

The UAW's efforts, which never gained traction, were discussed during a closed-door meeting with employees and VW executives at the Chattanooga plant in late March last year.

During the meeting, workers in the audience asked VW executives, including Jonathan Browning, head of North American operations, about the UAW's increased organizing efforts, according to people who attended.

Browning and other executives said the choice for UAW representation was up to the workers, repeating the company's long-held stance. One worker, addressing the crowd, said the plant did not need a union, which was met with loud applause and cheers, people at the meeting said.

(Additional reporting by Christiaan Hetzner in Munich and Jan Schwartz in Hamburg; editing by Andrew Hay)

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