Exclusive: VW divided on union for U.S. plant but worker vote a must

Thu Oct 10, 2013 8:56pm EDT
 
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By Bernie Woodall and Ben Klayman

DETROIT (Reuters) - Volkswagen AG's (VOWG_p.DE: Quote) top executives are divided over whether and how workers at the company's Tennessee assembly plant should be represented by a union, but ultimately will insist on a formal vote by those employees, a person with knowledge of the board's thinking said.

While VW's U.S. executives are hostile to the United Auto Workers, the eight-member management board may still ask the union to help set up a German-style employee board at the Chattanooga plant, said the person, who asked not to be identified.

The top executives feel that any final decision must be approved by the workers in a secret ballot to protect VW's reputation and assuage investors and U.S. politicians, said the source, who did not identify the VW executives.

Such a decision could be a blow to the ambitions of the UAW, which has made organizing foreign-owned assembly plants in the South a top priority to bolster its membership, which has shrunk by about three-quarters since its peak in 1979. UAW leaders have said such a vote would allow anti-union forces to scare workers into voting against the union.

A UAW success at Chattanooga could alter the industrial relations landscape for foreign carmakers in the United States, opening the door to similar organizing efforts at plants owned by Germany's BMW (BMWG.DE: Quote) in South Carolina and Daimler AG's (DAIGn.DE: Quote) Mercedes-Benz in Alabama, and possibly those owned by Japanese and South Korean automakers, analysts have said.

How this issue plays out also could affect whether and when VW's Tennessee plant gets to build a seven-passenger crossover vehicle, the source said. The two-year-old plant, which currently builds only the Passat sedan, was designed to produce more than one vehicle.

The UAW has said it has support of the majority of the 1,567 hourly workers at the Tennessee plant. UAW President Bob King told Reuters last month the union, seeking to avoid what it fears would be a divisive election process, would like the German automaker to voluntarily recognize the union as the plant's bargaining unit.

Critics argue such an approach would be undemocratic. An employee in the plant's paint shop, Mike Burton, said he has gathered more than 600 signatures from VW Chattanooga hourly employees on an anti-UAW petition.   Continued...

 
The logo of Volkswagen is pictured during a media preview day at the Frankfurt Motor Show (IAA) September 10, 2013. REUTERS/Pawel Kopczynski