The Wall Street Journal
Workers prove to be smarter than their bosses in Tennessee.
The decision by workers at the Volkswagen VOW3.XE -0.64% plant in Chattanooga, Tennessee to reject the United Auto Workers is the best news so far this year for the American economy. Even with Volkswagen management on its side, the union that combined with CEOs to nearly ruin U.S. car makers couldn’t persuade a majority voting in a secret ballot to let it become their agent to bargain with the foreign-owned company.
This wasn’t merely one more failed union organizing attempt. The UAW and its chief Bob King spent years working toward this vote as part of its strategy to organize plants in the American South, and all the stars were aligned in its favor.
Mr. King colluded with IG Metall, Volkswagen’s German union, to neutralize Volkswagen management. It pitched the collaborative vision of a labor-management “works council” at the plant that makes the VW Passat, and it claimed to have learned its lesson from the confrontation and strikes that hurt Detroit’s auto makers. Volkswagen management gave the union the run of the plant to lobby workers while denying similar privileges to union opponents.
So it’s nothing short of remarkable that the union couldn’t make the sale. The failure reflects how well the plant’s workers are doing without a union, to the tune of $27 an hour including benefits. The defeat also speaks to the harm the UAW has done to itself by driving GM and Chrysler to bankruptcy and pushing companies like Caterpillar to move new production from union plants.
These columns have long argued that a company organized by a union usually deserves what it gets, but most workers understand that the modern union offer is often a Faustian bargain. The UAW may be able to negotiate a near-term increase in pay and job security for current workers. But the price—in addition to the steep coerced dues—is usually a less competitive company that means less security and fewer jobs in the long run. The best proof is the UAW itself: It has lost 75% of its members in 35 years as its demands and work rules made their employers less competitive.
That long run might have come soon for Volkswagen’s Chattanooga workers. They know the company may decide as early as this month where to build a new SUV for the U.S. market, and the Tennessee plant is competing with Mexico for the job. Mexico already benefits from a low-tariff, free-trade pact with the European Union that the U.S. is only now negotiating, and a UAW victory would have been an additional incentive to go south of the Rio Grande.
The union is blaming Tennessee politicians for raising this possibility, especially GOP Senator Bob Corker, a former mayor of Chattanooga who helped bring Volkswagen to the city and who said last week that he felt “assured” (he didn’t say by whom) that the Tennessee plant would get the second production line if it rejected the union. The company disavowed that claim, but the union may use it as an excuse for defeat and to file an unfair labor practice complaint under the Wagner Act with the National Labor Relations Board (NLRB).
This isn’t likely to fly on the merits. Mr. Corker may have been impolitic. But he didn’t give up his right to free speech when he joined the Senate, and every public action by Volkswagen had favored the union. State legislators had said they might withhold future tax incentives if the UAW organized the plant, and Tennessee had reason to believe that a UAW success would hurt its ability to recruit other companies that would fear the union precedent.
Don’t believe those who say this means the end of the UAW. It has too many friends in high political places, as the 2009 auto bailouts proved. Federal law is also stacked in favor of unions, and President Obama’s NLRB is routinely stretching and breaking the law to make it even more so.
But the fact that unions must rely on brute government force shows how out of touch they are with modern economic reality. American manufacturing is making a modest comeback with the help of rising labor costs in China and the American energy revolution. But it could stage an even bigger revival without the threat that unions could once again make American production uncompetitive. The last thing the U.S. economy needs is to import European labor practices. In Chattanooga, and not for the first time, the workers are smarter than management.
