Volkswagen Chattanooga: Why VW execs love the NLRB complaint


Which way?

Which way?


Four workers of Volkswagen’s Chattanooga plant filed a complaint with the National Labor Relations Board, charging that Volkswagen officials said the plant “would not get additional vehicle production and future jobs unless a German-style form of representation was installed at the plant,” as Reuters reports. That charge is easy to prove. It is not unwelcome at Volkswagen’s board.

Last week, Volkswagen’s head of its global works council, said that forming a council was important if the plant wants a second model. “We know how important that vehicle is for Chattanooga,” Osterloh said. Osterloh is also deputy chairman of Volkswagen’s supervisory board, which must approve major production decisions.

Volkswagen’s new 7 seater SUV could be built in Tennessee or in Mexico, so “this is no idle threat,” said Mark Mix, president of the National Right to Work Foundation. “If VW management was discouraging workers from joining the UAW with threats, there’s little question that an NLRB prosecution would have already begun at the UAW’s behest,” Mix said. Right he is.

Speaking of Volkswagen’s management, it largely maintains cover on the works council issue. The works council matter was started by Volkswagen’s HR Chief Horst Neumann. He is what in Germany is called an “Arbeitsdirektor,”  a worker’s executive.  As part of the “co-determination” scheme, large German companies not only have a Supervisory Board where half the seats are occupied by the unions, the HR chief also is a leading union member.

In this setup, to criticize the unions usually is not career-enhancing. Employees and executives quickly learn to keep their opinions to themselves.  It is no surprise that the rest of Volkswagen’s board maintains radio silence about the issue.

According to Wolfsburg sources, this is what management could be thinking – what it really thinks remains a mystery.

  • Volkswagen’s management does not want the UAW in Chattanooga, this is one of the reasons why the plant was built in the South in the first place.
  • However, “what’s wrong with a works council?” the execs likely ask. “We have them everywhere except in Russia and China, and it doesn’t seem to kill us.”
  • If Neumann and Osterloh absolutely want a works council in Chattanooga, no board member will publicly stop them. Volkswagen has bigger fish to fry.
  • Volkswagen recently announced large-scale cuts, and those need the support of labor. A retreating European home market demands the biggest cuts. In this situation, nobody will risk an argument with the unions over a works council in far-away Tennessee.
  • The UAW would like Volkswagen to simply hand them the works council without an election.  However, it will be hard to argue against balloting in Chattanooga. “Fairness” and “democratic principles” weigh big in Germany. Volkswagen has always maintained that union or no union is up to the workers. According to German rules, after which this works council is modeled, the council must be established in secret ballot. Allegations of a rigged card check should seal the fate of a no-ballot decision.

The most likely outcome is that the matter will be put to vote. The UAW signaled that it might lose the vote. In the meantime, anything that delays the process will be welcome with Volkswagen’s executives, even if they will never admit it.