Right after I wrote about this week's vote at a Volkswagen plant in Chattanooga, Tenn. on whether to join the United Auto Workers and establish a German-style "works council" -- which would be one of the first times* a union organized a foreign automaker in the U.S. -- Sen. Bob Corker (R-Tenn.) called to clarify the terms of his strong opposition. I've transcribed his comments, with a few edits for clarity, and added a few notes of my own on his remarks.
Lydia DePillis: So, you had thoughts?
Bob Corker: I'm a former mayor of Chattanooga. I recruited [Volkswagen] to our state. I was the first person to call their number, and two of the three meetings with them took place in my home in Chattanooga. I know [VW Chairman Martin] Winterkorn really really well. We're in constant contact with Volkswagen at every level. Seriously, I don't know a public official that's been more involved with Volkswagen, nor, candidly, more involved with the UAW.
So I just wanted to clarify one thing. Our concern is not with the works council and never has been, and Volkswagen knows that very well. U.S. labor relations and German relations are very different. There's some question as to how a works council can be set up in the U.S., and there are various opinions on both sides of the spectrum, one says you have to have a union, one says you don't. But we in no way have been negative relative to the works council. It's really been the fact that the UAW would be the implementing entity. We've even told Volkswagen that, 'why don't you guys create your own union within the plant, if you feel like that is something that is necessary to fully implement this in a way you see fit.' I will say that BMW has implemented its works council without the UAW.
Note: BMW embraces a co-determination model, but has not responded to a request for clarification about whether or not it has a works council at its U.S facilities, nor was Corker's staff able to confirm the nature of employee-management relations there. "If they do have a works council, it's illegal," says Thomas Kochan, Co-Director of the MIT Sloan Institute for Work and Employment Research. "You cannot have a company-sponsored union."
LD: Why is the UAW so undesirable, in your eyes?
BC: I've just seen the effect that they've had on companies. I know these people personally. I know the person who's organizing the Chattanooga plant, I've watched him operate personally within the Spring Hill plant. I've seen the Spring Hill plant start stop, and fail, lay off, and start again and fail and lay off. And we have a plant right down the road, a Nissan facility that's been one of the best operators in the world, a few counties over in Tennessee.
Note: The General Motors plant at Spring Hill was idled in 2009, during the worst of the collapse, laying off some 2,000 workers. GM brought the facility back online in 2011 with new car lines, it's never experienced a strike, and it's been adding jobs since. Also, in 2007, Corker appeared much more sanguine about the plant's operations.
I was also really involved in negotiations with Chris Dodd when we were trying to resolve how the U.S. government might be involved during the crisis, and dealt first hand with them and saw their lack of care for the companies they were a part of. I've seen first hand how within a company how there's really two companies when the UAW's there, and that's the antithesis of how Volkswagen is. Volkswagen is an exciting place to be, and there's lots of teamwork. And they may decide to form a union themselves. But the UAW, even if you read the materials they've put out over the last 30 days, it's about confrontation, it's about fighting. It's the antithesis of how you'd describe a works council.
I just know the UAW well, I really do. And I've been to Detroit. Our community has worked so hard to be the shining star that it is, we have such a bright future. and we understand, this is not hyperbole or rhetoric, we are already having some difficulties with recruitment as this whole issue has been raised. It's the UAW, it's not unions. If you look at what their strategy is -- they have a tremendously declining membership. This is all about money for them. They feel like, if they can get up under the hood with a company in the south, then, they can make progress in other places.
Note: It's true that the UAW's membership has been vastly diminished since its peak at more than 1.5 million workers in 1979. But it's been on the rebound lately, as the American automakers stabilize, with three consecutive years of growth. UAW President Bob King has targeted the foreign automakers as an essential area for further recovery.
LD: BMW has a works council? I thought that was illegal.
BC: It's not illegal. As a matter of fact, I don't want to debate this, because this is a debate for lawyers, but I believe that it's easier to create a German-style works council without a union. We've looked at legal opinions that have been developed internal to Volkswagen but also other places. It's really an interesting problem. You can't really create with a union or without a union create a real German works council in the U.S., because the law that we have around the NLRB doesn't allow that. You can have one group that says we can do it better with a union. You have another group that is the antithesis and says absolutely not. But let's been honest, Volkswagen's board is made up of 11 management and 10 labor members. While management has been out fighting fires trying to deal with the issues the company has around the globe, let's face it, the labor side has in some ways outmaneuvered them on this.
Note: Volkswagen's board is actually made up of 10 shareholder members and 10 employee representatives; the CEO can cast a tiebreaking vote.
I appreciate the fact that Volkswagen has made an investment in our community. They actually pay higher wages than the UAW does. My only concern here is, I care more about my community and its future, and there's no question that the UAW organizing there, look it's just a fact will have an effect on our community's ability as we move ahead, to continue to recruit businesses.
Note: With a few exceptions, most legal experts do agree that having anything like a works council -- a joint labor-management committee with shared powers over how the facility is run -- is only feasible through a vote to join a union, which then cedes negotiating power over working conditions. "U.S. jurisprudence regarding employee participation committees from the early 1990s (the DuPont and Electromation cases) is rather settled," American University's Stephen Silvia, an expert in German labor law, wrote in an e-mail. In those cases, the National Labor Relations Board ruled that companies could not coordinate with workers outside the purview of a union -- which is still the case, given that U.S. labor law has barely changed in 30 years.
LD: Who's been expressing concerns about a union presence in Tennessee?
BC: If you look at what's happened over the course of the last couple decades, there's been a tremendous migration away from Detroit. It's really a sad story. Nobody would wish what's happened in Detroit on any community. It's just cratered. There's no question that the UAW has had a negative impact on the big three automakers. And the interesting thing is, that while I dealt with them, they constantly derided the transplant workers of the South. But they realize that they're over as a union under their current strategy. So what they re trying to do is migrate to the South, to get involved with many of these companies that have invested from other places. And what's happened is, the supplier networks that have made us so competitive is now becoming nervous over the fear that the UAW will make inroads into Tennessee and other places. So when I say it's more difficult, it's mainly more difficult among those people that are part of supplier network, but it has an effect on everyone, because people understand the confrontational approach that the UAW has taken.
Note: Suppliers may look at labor laws in a given state before locating there, but other factors -- like proximity to the assembly plants, and the quality of the workforce -- tend to be much more important.
I do wish you could witness the difference in culture between Spring Hill, in a group meeting, and at Volkswagen. When you walk into Volkswagen, you're proud to be there. It's exciting. And I hate to say it, within the Spring Hill plant, you feel like it's an us against them, there's friction.
Note: That may be because the Spring Hill workers have a particular animus towards Corker, who publicly sparred with the UAW during the auto bailout hearings and wanted to impose more stringent requirements on the car companies, including that they slash wages to the levels of their foreign competitors. Corker has been booed when he's showed up at the plant since. "The people here at this location know what he did in Washington, D.C.," says Mike Herron, chairman of UAW Local 1853, which includes the General Motors Spring Hill facility. "He can't hide the fact that he failed to support the U.S. auto industry when it really needed the support. The guy absolutely failed us at every turn."
* Corrected to reflect the fact that this would not be the very first foreign-owned automaker organized in the U.S. The UAW also organized two North Carolina factories owned by Freightliner, a subsidiary of DaimlerChrysler, in 2003.