Been a busy month for me so I haven’t had a chance to give the story due diligence, but if you didn’t hear: the German automaker Volkswagen’s U.S. division attempted to unionize their own workers in Tennessee.
This is unusual for a number of reasons, as I’ll get to in a moment, but it’s particularly significant coming in Tennessee, a state that has become home to a lot of foreign car manufacturers’ American branches and is a so-called “Right to Work” state. “Right to Work” laws are designed discourage unionization by changing how worker votes occur and allowing management to intimidate or pressure workers into voting against forming a union, i.e. giving workers the “right” to work outside of union (because every American must have the right to be their own David against the corporate Goliath in contract negotiations… I guess?).
So anyway, if VW employees unionize, it will automatically put pressure on Tennessee’s other foreign-based carmakers to raise wages somewhat to remain competitive and retain their workers, even if they remain non-unionized (past studies have demonstrated this effect pretty clearly), and it will probably encourage unionization drives elsewhere.
Obviously most of the companies and their Republican political backers don’t want that to happen. Some of the anti-union Republicans, including U.S. Sen. Bob Corker (R-TN), a longtime vociferous opponent of unions and supporter of RTW legislation, were pretty upset and tried to interfere in the unionization vote at Volkswagen.
But of course, as noted above, Volkswagen was actually behind the push to unionize their employees in the first place. Needless to say, this interference has not sat well with management.
So why is VW’s U.S. management trying to unionize their employees in the first place?
Beyond what I shall euphemistically term Volkswagen’s particularly “populist origins,” by and large, German carmakers in general — along with most major German corporations — are big fans of cooperating closely with unions. This cooperation increases social-corporate harmony and it encourages win-win negotiations instead of everyone trying to bleed everyone else dry. This tradition of having unions and management work together in formalized joint committees, and (in Germany) even usually having the companies partly owned by the workers themselves to give them an official say in management and a stake in the company’s long-term health, has been a key tool for consensus-building and smoothing potential tensions over. That all helps avoid strikes and the violence that often plagued heavy industry in the U.S., UK, and Germany in the 19th century. After World War II, West Germany made much of the tradition a formal legal requirement; tensions and disunity were to be kept at bay at all costs.
The only time this cooperative approach has really been tried on a wide scale in the United States was under Great Depression emergency legislation from FDR which the Supreme Court eventually struck down. The idea was that it would be a lot better to keep workers working instead of going on strike and it would reduce the chance of a mass revolution by the increasingly desperate working class. FDR felt that having the government force corporations to work together with the unions and increase wages cooperatively, rather than under labor duress, was a fair trade-off.
But VW’s unionization push in the modern era, in Tennessee, threatens all the non-unionized Tennessee carmakers, hence the freakout. But Volkswagen is standing firm against the union-busters. The company just filed a joint National Labor Relations Board petition with the United Auto Workers against the Republicans and others who tried to interfere with the firm’s attempt to unionize their own U.S. workers.