A little-noticed story was recently reported about Bernd Osterloh, chairman of the Group and General Works Council of German carmaker Volkswagen, A.G., trying to get a foothold into the Volkswagen plant in Chattanooga, Tenn., which could pave the way for the United Auto Workers.
A little background: German industrial relations are characterized by a dual structure of both trade unions and works councils. Works councils have been constitutionally enshrined in Germany since the 1920s. They are elected by the employees, have a seat on the board of directors and advise the company about worker’s issues, such as pay, benefits, work rules, working conditions and even the product itself.
This is pretty heady stuff, but the chairman of the board, elected by the shareholders, gets to break any ties. In Germany a company can have a workers council yet not be unionized. They cannot call for strikes. This is a creation of European labor, and is used to facilitate agreements made at the national level by unions and employer associations.
Volkswagen’s U.S. plant is their only facility that does not have a works council, so the company is quite familiar with the concept. The UAW is well aware of this and has consulted with Volkswagen’s union leadership in Germany, and probably Osterloh, to develop a strategy to get a presence in Volkswagen here with something modeled after a German works council. It would have to be creative, since U.S. labor laws theoretically would permit councils only if the plant has been unionized and the union recognized as their bargaining agent for their employees.
The UAW has been obsessed with organizing foreign-owned plants in the South, where right-to-work states such as Florida are attracting all sorts of capital investment. Its membership has declined from 1.5 million to 380,000 today. Its has to do something, so UAW leaders are sweet-talking V.W. into believing they have changed their mission statement to embrace more of a collegial partnership with industry, rather than an adversarial one. How naïve can a company be? Recall the collegial Andy Stern, former president of the Service Employees International Union and a friends of President Barack Obama. Stern who famously said, “We like to say we use the power of persuasion first; if it doesn’t work we try the persuasion of power.”
V.W. workers believe the company is union friendly, given its German roots, so if the UAW is viewed as pushing for the works council idea, it will bolster its image as the good guy to the plant workers and set up a more favorable atmosphere for a union vote in the future.
Local Republican politicians have expressed concern, so Osterloh said he’d be more than happy to talk to them to allay their fears. The governor is worried because out-of-state companies that are considering relocation to Tennessee are worried and may elect to go to other Southern states.
The National Labor Relations Board now has a quorum, as the Senate has confirmed all five of Obama’s nominees. The board will undoubtedly take a liberal approach to the interpretation of labor law. V.W. executives have said they “are working on an innovative model for the representation of employees interests…based on positive experience in Germany.” They’d better be careful. The NLRB could circumvent the law — which Obama and his inner circle of power regularly do — to allow an employee-elected council without a union vote.
Talk about the camel getting its nose under the tent — and the evocative saga of the bailouts and bankruptcies of Detroit’s General Motors and Chrysler.
John Reiniers, a retired attorney, lives in Spring Hill.