Voting by workers at the Volkswagen plant in Chattanooga, Tenn., on joining the UAW concluded Friday. (Erik Schelzig / AP)
Chattanooga, Tenn.— The United Auto Workers union suffered a major defeat Friday as workers at Volkswagen AG’s assembly plant narrowly rejected a proposal to form a German-style works council and join the union.
The dramatic rejection by workers in a 712 to 626 vote raises serious questions about the UAW’s expensive and lengthy efforts to organize foreign automakers.
The vote here at the 4-year-old plant — after more than two years of effort by the union — may have been the Detroit union’s best chance to reverse nearly two decades of defeats and is likely to prompt a review of strategy when the union’s new leadership team, including a new president, is elected by members in June.
It’s a dramatic reversal from September, when the UAW presented a majority of union cards signed by members saying they wanted to join.
“While far from a death knell, this latest defeat suggests a turbulent future for an organization that has steadily lost membership and influence over the past four decades,” said Karl Brauer, senior analyst at Kelley Blue Book.
“We may never know what impact a union would have on future Volkswagen plant operations in Chattanooga, or other foreign plants in the region, but we do know the rapid expansion of Southern auto manufacturing has occurred without union representation.”
UAW President Bob King called the results deeply disappointing and said the union would decide whether to appeal. The union vowed not to leave Chattanooga and said the union wouldn't give up its organizing efforts. “We don't quit,” King said. “We are looking at all of our legal options. We're not going to make it on the spur of the moment.”
King called the results a “temporary setback” but said the union would reassess its strategy. He said he thought the turning point was threats made against the UAW by Republicans over state incentives for future projects, calling them “outrageous.”
“Unfortunately, politically motivated third parties threatened the economic future of this facility and the opportunity for workers to create a successful operating model that that would grow jobs in Tennessee,” said UAW Region 8 Director Gary Casteel, who directs the union’s Southern organizing.
The road ahead only gets tougher for the UAW in working to organize other foreign plants. Unlike other automakers, VW didn’t oppose the UAW, hire anti-union consultants or give talks warning workers about the downside of joining a union.
A spokesman for Gov. Bill Haslam, Dave Smith, said “the governor is pleased with the outcome and looks forward to working with the company on future growth in Tennessee.”
The defeat came as well-funded conservative groups mounted an expensive campaign to convince workers to reject the UAW. Many Tennessee Republicans argued that joining the UAW could damage the area’s business climate.
Sen. Bob Corker, R-Tenn., said Wednesday that he had learned from conversations with unnamed VW officials that the automaker would locate production of a new midsize SUV in Tennessee if workers rejected the union — something VW denied.
But workers said it had an impact. “That scared some people,” said Mike Cantrell, 56, who has worked at VW for three years and supported the UAW.
“Needless to say, I am thrilled for the employees at Volkswagen and for our community and its future,” Corker said in a brief written statement.
VW Chattanooga CEO Frank Fischer said employees aren’t opposed to a German-style works council.
“Our employees have not made a decision that they are against a works council,” Fischer said. Company officials found “great enthusiasm” for a works council both inside and outside the plant, he said.
The works council vote was an important step for the UAW, which for years had tried to organize foreign auto plants in the U.S. and looked to the VW vote for momentum in taking on other European- and Asian-owned automakers making cars here.
King said in a Detroit News interview Thursday that the union would move on to its next organizing campaign, win or lose in Chattanooga.
Some experts think the UAW would aim to organize workers at VW’s nearby auto suppliers — especially after VW said it supported a works council.
Others think it would focus on the Daimler AG Mercedes-Benz plant in Vance, Ala., about 180 miles south of Chattanooga. The UAW has been working with Daimler’s German union as it tries to win support from workers to join the UAW.
The UAW could focus on its campaign to win support for a union at Nissan Motor Co.’s assembly plant in Canton, Miss.
But other automakers almost certainly would not be as supportive.
VW endorsed the idea of a works council at the plant and didn’t hire anti-union consultants or make presentations urging workers to oppose a union. Some automakers in the past — implicitly or explicitly — have said they could shift work to other plants if the union was recognized.
Other automakers, including Nissan and Honda, have strongly opposed a union.
A works council is established by plant employees but paid for by the employer to negotiate factory-specific conditions, such as bonuses, daily work hours and codes of conduct. Bargaining for wages and benefits is done by an industry-level union.
Works councils have been effective at Volkswagen and other companies in Europe. Their inclusive membership — they are made up of representatives of blue- and white-collar workers, managers and supervisors — helps reduce conflict and promotes the view that the employer and its employees are partners in a common enterprise.
Tennessee is among the 15 states with the fewest lowest number of union members, but the ranks of union members there in 2013 membership rose 25 percent to 155,000.