VW labor leader threatens to block expansion in anti-union South

The drama surrounding Volkswagen’s Tennessee facility has encountered a new twist, as the company’s labor leader, Bernd Osterloh, threatens to block any expansion plans in the anti-union South.

Osterloh argues that a works council will be a central element in any decisions related to new US plants. He sits on VW’s supervisory board as one of ten works-council representatives in the 20-member panel, suggesting the threats may easily be enforced.

“I can imagine fairly well that another VW factory in the United States, provided that one more should still be set up there, does not necessarily have to be assigned to the South again,” said Osterloh, as published in the German newspaper Sueddeutsche Zeitung and quoted by Reuters.

The labor leader’s threats appear to be focused on implementing “co-determination,” a popular system in Germany that gives workers important roles in company management. VW representatives have credited this approach with helping the company achieve its current status among the top three global automakers.

Conservative groups urged plant workers to vote against the UAW over fears that unionization would make the state less competitive in the industry. US Senator Bob Corker suggested the company would choose the Chattanooga plant to build a new SUV if the workers rejected UAW representation, while State Senator Bo Watson threatened to kill tax incentives over a unionization move.

“The conservatives stirred up massive, anti-union sentiments,” Osterloh said. “It’s possible that the conclusion will be drawn that this interference amounted to unfair labour praxis.”

Unless the UAW can prove that the legislators were commenting on behalf of the company, which maintained a neutral stance and appeared to welcome the move, the interference claims may be difficult to pursue.

Regardless, VW established an agreement with the UAW to establish a German-style works council if the workers voted for representation. The approach would have been a mix of the German system and the UAW’s typical structure in other US plants.

VW has voiced its intention to establish a works council in Chattanooga despite the UAW rejection, though it is unclear if the company can fully mimic its German operations without violating laws that restrict company-funded unions.