Chattanooga and the UAW

Nearly forty years ago today, the United Auto Workers (UAW) successfully organized a foreign auto transplant in the United States. The dismal denouement of that sequence in labor history is critical to understanding the defeat of the UAW’s organizing drive at the Volkswagen plant in Chattanooga, Tennessee in February 2014.

Back in 1978, the UAW organized the work force in Volkswagen’s new plant at New Stanton, Westmoreland County, Pennsylvania which produced the “Rabbit,” a small subcompact car targeted at the American market. Since VW had garnered plaudits and profits from the popularity of the “Beetle” and the beloved “hippie-mobile,” the VW bus, expectations ran high as the plant ramped up production. Company officials spoke confidently of capturing five percent of the American market and projected the new plant, VW’s first in the United States, would be essential to meet the envisioned demand. Nine years later, Volkswagen announced it would close the following year, eliminating 2500 jobs at the plant and a lesser number at VW’s American offices in Detroit. The union denounced the decision as revealing “a shortsighted, bottom-line mentality” that “betrays a loyal and productive U. S. workforce in Pennsylvania.”

But, as so often is the case, a deeper reality belied angry claims of the moment. VW had dramatically overestimated the Rabbit’s appeal. The car’s sales peaked at 3 percent of the U.S. market in 1980. By the time the company announced the closing in November 1987, that figure had dropped to 1.9%. VW remained a model of efficiency and workplace collaboration, but there had been a “revolution” in the American market. By 1987, 35 models of small-sized, economical autos were sold by foreign manufacturers in America, some manufactured in South Korea, Yugoslavia, Mexico, or Europe; others in Japanese-owned plants in the U.S. Continually undersold, VW cut its losses and closed shop.

The 1980s had witnessed, as we now grasp, the first sustained effect of a fundamental transformation of manufacturing and the industrial economy, both in the U. S. and throughout the industrialized world. Technological innovation—robotics and digitalization—was already a factor in manufacturing. And change was also driven by a race to the bottom rooted in low-wage countries where governments offered corporate-friendly policies and financial inducements. Simultaneously, foreign car producers, including Nissan, Toyota, Mercedes-Benz, and, in time, VW again, shifted a percentage of their production to the United States, largely in the American South. All these developments put pressure on Detroit’s Big Three auto companies and on the UAW as well. The 1980s marked the start of the union’s decline. In 1979, the UAW reported some 1.5 million members. That figure has dropped drastically since and, in 2013, the UAW comprised less than 400,000 members, with only about two-thirds of them still working in the auto industry.

Union organizers in Chattanooga, though, seemed to be beating these trends earlier this year. In the run-up to the vote to join or reject the UAW, many observers thought victory was at hand. The company, following German tradition, and reinforced by the insistence of its German union, I. G. Metall, had stayed neutral. The UAW had begun organizing, with adequate funds, two years before the vote, and, in the months before the election, reported that a majority of the workforce had signed cards supporting the drive. What went wrong?

The internet and the traditional press have crackled with answers to that question since the February 14th results were announced. While explanations have varied, most commentators have cited the intervention of politicians in the closing months and/or criticized the union’s strategy and tactics. (Those who welcomed the results harped on related themes, though in triumphal tones.) Tennessee Governor Bill Haslam and U. S. Senator Bob Corker had both publicly threatened a union victory might result in a withdrawal of attractive state inducements if VW wished to open a second plant in Chattanooga. Their threats seemed weighty in the wake of VW’s recent decision to build a new Audi plant in Mexico. UAW president, Bob King, speaking with Time Magazine, expressed his fury at this “outside influence…It’s never happened in this country before…[that state and national politicians] threatened the company with no incentives, threatened workers with a loss of product.” King had his own critics. Their ire was raised by his (and the union’s) soft approach to VW. In 2011, this argument goes, King and the union approached VW in an overly conciliatory fashion to discuss the planned organizing drive. King was aware, of course, of VW’s traditional stance on labor relations, and both company and union knew I. G. Metall’s representatives on VW’s Board of Directors had been instrumental in framing the company’s position. King’s critics imply that if the UAW had taken a more aggressive stance, focused on creating community support, it might well have won over enough workers to reverse the close 712-626 election. Per Nicole Aschoff’s analysis in Jacobin: “The UAW needs to examine its fighting roots and remember where power comes from…rank and file workers.”

Any conversation that talks up the UAW’s “fighting roots” in the rank and file means to evoke the central mythos of UAW history, the famous Flint sit-down strike in 1937. That historic victory not only won union recognition at General Motors, but served as the inspirational template for generations of organizers: Trust the rank and file’s militancy, learn from their courage and tactics, and approach the corporation with the wary alertness of a combatant in struggle. But as my Cornell colleague, Louis Hyman, pointed out last year in Huff Post Business, that heroic version of the working class in struggle misses the central strategic lesson of the Flint strike. The Flint plant alone made the auto bodies for the entire GM system at that time. To close Flint then was to close every GM production plant, and all of the corporation’s suppliers as well. GM learned from Flint never to make that strategic mistake again.

When it comes to learning curves, important figures in the UAW and many of its supporters failed to keep up with the industry. At the 1984 UAW convention, then-president Owen Bieber vowed to organize all seven Japanese plants operating or planned in the U.S. Of the Honda plant in Marysville, Ohio, Bieber pledged: “If it takes five months or five years, the outcome of Honda in Ohio will be the same as it was for G.M. 50 years ago in Flint.” The Marysville plant remains non-union today. And, with the exception of two joint venture plants in Illinois and California, where American and foreign manufacturers worked with the UAW, there has been no successful union organizing drive in auto transplants since Westmoreland. Why?

It is not by accident that most auto transplants are located in the American South. (Though those that went elsewhere to Indiana, Kentucky, and Ohio remain non-union too.) The region has “a global brand” as a union-free environment—as Micheline Maynard wrote in Forbes following the VW vote—which it proudly advertises and fiercely protects. And that brand isn’t limited to the auto industry. Take the example of union efforts to organize the textile industry in Kannapolis, North Carolina. Organizers called the first election in 1939; many elections later, the workers voted in the union in 1999, by a 52-48% margin. Four years later the company—then owned by Pillowtex—declared an “immediate and total liquidation” following bankruptcy proceedings and closed the Kannapolis plant.

One question that emerges from this painful history concerns the thinking of the majority of Southern workers (and that 48% in 1999) who have repeatedly voted against unionization since 1939. What’s on their mind? It’s not likely that an appeal to the “fighting roots” of the labor movement will speak to them. To succeed in the American South, as many union organizers well know, demands a sensitivity to cultural attitudes that can be profoundly difficult for outsiders to grasp. American culture, in general, but the South in particular, has nurtured an individualism inherently resistant to institutional structures and collective authority. A lone worker may accept the power of his or her employer as a given, but “joining up” with others, especially when union activism may result in the loss of one’s livelihood, is often very difficult. Moreover, for many Southerners, unionism seem at odds with their received sense of American patriotism. Many Southerners across class lines define unions as alien—institutions that belong to a suspect, northern (read liberal) culture. Religious beliefs and faith-based communal practices reinforce such attitudes, a compelling factor in a region suffused with a conservative theological understanding of evangelical Christianity. Then there’s race. Unions have meant integration in the South, and that has encouraged white working people to resist union drives longer than in other sections of the country. Employers such as those in Kannapolis limited the number of African Americans to 25% of the work force as late as the 1980s since black workers tended to support unions. This entire complex of cultural and racial attitudes isn’t set in concrete. The South has seen important changes. Still, the region’s distinctive mix of individualism, conformism and racism remains potent.

Beyond “culture” there’s basic economics. We have read much in recent years about American firms outsourcing manufacturing jobs in pursuit of lower wage costs. Apple’s massive Chinese supplier, Foxconn, with nearly 1 million workers in 2012, has received extensive criticism for their cost-cutting imperatives. But German auto manufacturers’ approach to the American South is informed by the same logic. Given production costs in Germany, the American South is a low wage site, and it’s prime territory for that reason. Broadscale hostility to unions in the South makes the region attractive to Euro and Asian corporations, but so does the South’s ongoing history of low wages and serious un-(and under)employment, notwithstanding the “recovery” from the 2008 recession. When VW Chattanooga prepared to open in 2011, for example, it received 80,000 applications for 2,000 jobs. In 2014, as those workers with VW jobs voted not to join the union, 27 percent of Chattanoogans lived below the poverty threshold of $19,530 for a family of three. A $30,000 a year job with benefits was enormously attractive—a lifeline for employees and their families who felt lucky to grab hold.

The wage issue loomed large for certain workers who voted against unionization. Sharply aware of the two-tiered wage system the UAW had accepted for its Detroit members, where new hires received as much as 30% less than more experienced workers, a significant number of Chattanooga workers calculated they already made as much, if not more, than new hires would receive in the new contract. The union, moreover, has not won major increases for any of its workers. As David Barkholz wrote in Automotive News: “The value proposition to VW workers [in Chattanooga] just wasn’t there.”

Finally, there is the unavoidable issue of capital flight. Every worker is at the mercy of his or her employer—whether American or foreign-owned—since it can pick up and move wherever it wishes, whenever it wishes. As long as legal obligations are met, no law prevents a private firm from executing its judgment of what’s in its best interests, as Jefferson Cowie’s Capital Moves details so well. Furthermore, as much as 50 percent of autos sold in the United States are already manufactured in non-union plants, either in transplants here or in plants abroad. Little wonder, then, that the UAW continues to wane. Its decline, of course, is one chapter in the current deterioration of American unionism. Unionization in the private sector is now under 7 percent, down from approximately 35 percent in the mid-1950s. While public sector unionization remains in the mid-30 percent range, that’s likely to fall in the near future. Steven Greenhouse’s recent, depressing analysis in the New York Times of the impact of Wisconsin’s Act 10, which severely restricted the right of public-employee unions to collective bargaining, is suggestive on this front. And Wisconsin’s experience isn’t limited to one state. Michigan may be close to the heart of UAW history and myth, but it endorsed a referendum last fall to make it a right-to-work state, which legally enables the governor to follow the Wisconsin model.

Any discussion of the Chattanooga story that ends on an upbeat note is dishonest. Calls for worker militancy, untethered to a realistic strategy, may be momentarily stirring. But such rhetoric is ultimately distracting, and potentially destructive. It’s possible a particular plant might win union recognition in the near future. Union supporters now look to workers in the Nissan plant in Canton, Mississippi, who will vote to unionize this summer. Yet the fact the union in Canton has been organizing for nine years suggests such a victory, if achieved, won’t signal the start of an immediate turnaround. The broader transformation of manufacturing, the dominant power of capital, and the deep differences among working people in the dailiness of their social, cultural, and/or political lives are undeniable. For unions, the current situation makes for an environment that’s as daunting as the 1920s, or perhaps even the 1880s. Heroic myths are self-defeating and, to borrow from Bertolt Brecht, the essential if difficult task is to start, not from the “good old” days, but from “the bad new ones.”

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