Analysis: VW in delicate dance with German union over Tennessee plant

Mon Nov 25, 2013 2:50pm EST
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By Bernie Woodall

DETROIT (Reuters) - Volkswagen AG (VOWG_p.DE: Quote) officials in Germany and the United States are performing a delicate dance with VW's influential German union as they wrestle with the possible representation of workers at the company's plant in Tennessee.

Volkswagen is trying to introduce its model of a German-style works council, which would help set work rules for white- and blue-collar workers, at its only U.S. plant, in Chattanooga.

While Volkswagen has works councils at all of its plants outside of China and Tennessee, it faces challenges in forming one in Chattanooga for various reasons, including a split within the company over whether to support the United Auto Workers union.

IG Metall, the German union with seats and influence in VW's boardroom, is pressing the company to establish a works council at Chattanooga. IG Metall also supports the UAW's bid to organize the U.S. plant.

It is IG Metall's influence and the company's need to keep labor peace in Germany that has Volkswagen's U.S. officials careful not to misstep. At the same time, they also are trying to maintain good relations with Tennessee's politicians, led by anti-UAW Governor Bill Haslam and U.S. Senator Bob Corker, both Republicans.

In China, VW plants are jointly owned with Chinese partners, making the Chattanooga plant, opened in 2011, the company's only wholly owned plant without a works council.

Volkswagen cannot institute just a works council in Tennessee because U.S. labor law does not allow for company-sponsored unions. In order to set up a works council for the 1,570 hourly paid manufacturing workers at Chattanooga, a U.S. union needs to be involved, because a foreign-based union cannot represent U.S. workers.

A works council at Chattanooga would act largely as it would in Germany and not negotiate wages and benefits.   Continued...

A Volkswagen "Beetle" (L) and an "UP!" are pictured in a delivery tower at the company's headquarter in Wolfsburg, March 12, 2012. REUTERS/Fabian Bimmer