Feb. 3 (Bloomberg) -- Volkswagen AG has struck a deal for workers at a Tennessee assembly plant to vote next week on whether to join the United Auto Workers, which the union says could pave the way for German-style worker councils.
The U.S. National Labor Relations Board will supervise the Feb. 12-14 vote after a majority of workers at a Chattanooga plant signed authorization cards, the UAW said today in a statement. The Chattanooga plant, which has about 1,550 hourly employees, is the only major Volkswagen plant without some form of union representation, the UAW said.
The UAW has fought for years to form bargaining units at a foreign-owned U.S. car factory, said Gary Chaison, a labor law professor at Clark University in Worcester, Massachusetts. The tactic of organizing employees into worker councils could help the UAW increase membership, he added.
“Essentially the UAW, which has for years been trying to make inroads into foreign-owned plants, finally has a foreign-owned plant it can organize,” Chaison said in an interview. “That’s really remarkable.”
The UAW, which has lost 75 percent of its membership since 1979, has pushed to gain recognition at Volkswagen’s plant in Chattanooga, which opened in 2011. In next week’s vote, the UAW is seeking to set up a workers council, an employee body that’s common at most large German companies to resolve labor disputes and protect jobs.
“Volkswagen Group of America and the UAW have agreed to this common path for the election,” Frank Fischer, chairman and CEO of Volkswagen Chattanooga, said in a statement. “That means employees can decide on representation in a secret ballot election, independently conducted by the NLRB. Volkswagen is committed to neutrality and calls upon all third parties to honor the principle of neutrality.”
In Germany, union affiliation isn’t required for employees to form worker councils, Chaison said. It’s not clear if that’s the case in the U.S.
“This is the way to open the door for the UAW to get into these companies,” Chaison said. “We’re really talking about unexplored territory here.”
The Chattanooga plant is the favored North American production site for the company’s upcoming mid-sized sport-utility vehicle, based on the Crossblue concept, which may not hit showrooms until 2016. Wolfsburg, Germany-based Volkswagen, the world’s third-biggest automaker, is also weighing other locations including a factory in Puebla, Mexico, which offers lower costs, company executives said last month.
“Volkswagen is known globally for its system of cooperation with unions and works councils,” UAW President Bob King said in the statement. The union seeks to work with the company, he said, “to set a new standard in the U.S. for innovative labor-management relations that benefits the company, the entire workforce, shareholders and the community.”
The workers council wouldn’t represent employees in talks over wages or benefits. The distinction between the role of the council and full union representation created some confusion among plant employees, leading to a complaint to the labor board that was ultimately dismissed, Chaison said.
“Some workers were saying, ‘What are we voting for?’” Chaison said. “Traditional collective bargaining or an alternative, German-type labor relationship? The question is the word unionized. It’s not traditional unionization.”
Union leaders frequently hold the top spots on the councils, though the groups represent all employees, even those who aren’t union members. Volkswagen and the UAW met in Wolfsburg in August to consider setting one up at the Chattanooga factory.
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