Volkswagen workers voting to unionize in Tennessee would get fraction of power of German workers

Volkswagen’s unionized workers command unique power in the auto sector. They hold sway over the carmaker’s strategy, consistently win pay rises, and suppress job cuts. At least, that’s the case in Volkswagen’s home of Germany.

But across the Atlantic, VW workers are getting a flavor of the battle that has gripped Tesla, Ford, and Stellantis as they seek to unionize in the U.S.

Volkswagen workers in Chattanooga, Tennessee have set a date next month to vote on whether they will join the United Auto Workers (UAW) union, the National Labor Relations Board (NLRB) announced Monday.

The secret ballot will take place between April 17 and April 19, after employees at the 4,300-worker factory petitioned Volkswagen seeking an election. Volkswagen says it supports workers’ right to a “democratic process,” AP reports.

The vote shines a fresh spotlight on union cultures between the liberal European market and the hawkish U.S. one, one motivated by the UAW’s huge victory in Detroit last year. 

It’s also a reminder that whatever happens with the vote, Tennessee’s VW workers can expect a rawer deal than their counterparts in mainland Europe.

Europe’s union-friendly model 

In Europe, Volkswagen workers unionize through IG Metall, Europe’s largest industrial union representing 2.2 million workers, and its works council. 

These councils are unique even in the more union-friendly hub of Europe. Unionized workers make up part of a supervisory board that has sway over major aspects of company strategy. 

It has helped staff enjoy a heap of benefits. 

In November 2022, workers at Volkswagen’s western German plants won an 8.5% raise as part of a two-year pay deal. 

While below inflation at the time, it looks like a hefty pay increase now as price rises slowed. The increase also beat out raises from other automakers in the region.

But worker influence isn’t just limited to bargaining on pay, with some of the workers having their vacation days upped to 45 in 2018. 

In September, Volkswagen’s works council also had the power to demand clarity from the automaker on its turnaround plan that would involve $10.7 billion in cost cuts.

Daniela Cavelo, the head of Volkswagen’s works council, commands executive-level importance, pressuring the group with high-profile public interviews that rail against the prospect of job cuts, while even passing comments on the group’s EV strategy.  

“Even if some believe that we at the works council have a tendency to step on the brakes, that’s not the case, because we see what’s necessary. If we don’t succeed in this transformation now, we will also jeopardize our jobs,” Cavelo told the FT of Volkswagen’s EV transition.

U.S. workers striking back

“We need a say in our schedules, benefits, pay, and more. We’re proud to work at Volkswagen, but we also know the value of a voice at work,” Isaac Meadows, a VW worker, said in a union statement, AP reported.

The U.S. doesn’t factor into Volkswagen’s global works council remit, and common trend that is facing a reckoning as workers demand better recognition.

Foreign automakers like Volkswagen have managed to avoid a growing union headache by planting themselves in the south of the U.S., where Right-to-work laws make it tougher for workers to coalesce.

Workers at the plant have previously failed to unionize in 2014 and 2019.  

It seems sentiment in the region continues to lean away from collective bargaining. 

Last week, Republican Tennessee governor Bill Lee opposed the idea of Volkswagen’s employees unionizing, saying “workers should keep their future in their own hands.” 

“I think it would be a mistake for workers at that plant or any plant to turn their future over to someone else, namely to the union,” Lee told reporters. 

It’s not just lawmakers that might serve to motivate Tennesee’s union-friendly VW workers, but successes by unions further north in Detroit.

The UAW struck a deal that would see Ford, GM, and Stellantis workers receive a 25% pay rise over the next four years.

Volkswagen offered production workers in Chattanooga an 11% pay rise last year. While it outpaced raises in Germany, it lags the deal struck by the UAW in Detroit.

If they do unionize, Volkswagen workers are likely to push for more parity with Detroit automakers.

It’s unlikely, though, that Volkswagen’s Tennessee employees will ever enjoy the same power as their counterparts in Germany thanks to long-held cultural clashes between European and U.S. work culture.

Representatives for Volkswagen and the UAW didn’t immediately respond to Fortune’s request for comment.

Volkswagen is one of several German companies that expanded in the U.S. with investment projects last year, helping drive record capital inflows to the country.

The group announced in March last year that it was committing $2.2 billion to a plant in South Carolina, where workers would build an EV version of its classic off-road Scout SUV.

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