All aboard the Chattanooga to Pyongyang: VW car-workers' in Tennessee could change the course of unions in America

If UAW sets up shop it will hand the country's enfeebled union movement its most significant victory in years and mark a new departure for US industrial relations. But some predict it will hit the buffers

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Other than the Oscars, what's the most closely watched vote in the US right now? It's not on Capitol Hill to be sure: rancorous, gridlocked Congress has virtually ceased to be an agent of meaningful change in America. My candidate would be one in the unlikely setting of Chattanooga, Tennessee. There, workers at Volkswagen's flagship assembly plant will decide whether to allow the United Automobile Workers to set up shop. If they say yes, they would not only hand the country's enfeebled and demoralised union movement its most significant victory in years. Just possibly, they could also be setting a new path for labour relations here.

In many respects it's an odd story. When companies open new factories in the US, the last thing they usually want is to have the unions around. And so it seemed when VW inaugurated its new plant in Chatanooga three years ago – following in the foosteps of its German rivals BMW and Mercedes-Benz, which had been operating plants in two other southern states, South Carolina and Alabama, since the 1990s.

The assumption was that VW had chosen Tennessee not just because of $600m of incentives offered by a state desperate to burnish its industrial credentials, but also because in the conservative, Republican-run South, unions were traditionally weak. So different from Detroit, the original motor city and UAW's fief, where the union's insistence on lavish health care and pensions benefits helped drive the "Big Three" carmakers to the brink of collapse.

But then something happened in Chattanooga. First, the UAW announced last September that a majority of the plant's 1,600 workers had signed forms saying they wanted union representation. Even more striking, the company itself now actually appeared to welcome the prospect.

The smart explanation was that Volkswagen didn't want to risk a showdown back home with the powerful IG Metall union – Germany's equivalent of the UAW and then some – which was demanding that workers at the Tennessee plant be permitted union representation, like those at almost every other VW factory around the world. The company, however, maintains that it wants to set up a German-style works council at Chattanooga, where managers and workers are represented, to ensure the smoothest running operation. Under US law, the plant has to be unionised for this to happen; hence VW's quiet embrace of the UAW.

Now, most neutrals might think this was an experiment worth trying given the undoubted role of unions and works councils in maintaining the success of Germany's manufacturing juggernaut. But as the eternal ideologically-charged debates over guns and abortions demonstrate, in polarised America neutrals are few. Tennessee, like every other southern state, has a "right-to-work" law (this, rather misleadingly, does not guarantee a citizen a job, merely his or her right not to be represented by a union).

Meanwhile, the state's Republican political rulers portray the UAW's impending arrival as a Second Coming of Karl Marx, while the arch-conservative editorial pages of The Wall Street Journal ran the headline, "Pyongyang, Tennessee". Some of Washington's heavyweight pro-market, anti-tax, conservative lobbying groups have taken up the cause, noting that the union movement is a big supporter of the Democrats and that if its demands are met, the consequence will be bigger government and higher taxes for every American.

They have been joined by a local group, calling itself Informed Team Members at Volkswagen Chattanooga, which has set up a website, no2uaw.com. Like other opponents, it maintains that the UAW would bring disaster upon Chattanooga, just as it did upon Detroit. It further claims that in just a fortnight, a third of the workers signed a petition to keep the UAW out. If the latter were so sure of its majority, the anti-union front argues, it would have leapt at the idea of a secret ballot of workers. A secret ballot, it seems, is what VW now envisages. And the result could have big consequences.

For America's union movement, these are dark days. The reasons are many and familiar, ranging from the decline of traditional manufacturing and the growth of a low-wage service sector, that has enabled companies to hold down costs at home by the implicit threat of shifting operations to cheap-labour countries. Rightly or wrongly too, an aura of sleaze and corruption still haunts the unions, making it more difficult for organised labour to build a sense of solidarity, of shared interest, among workers. The deep-rooted national ethic of putting the individual ahead of the collective, makes it harder still. Union-busting is as old as industrial America.

Since the crash of 2008, things have gone from bad to worse. The Great Recession that followed left many grateful that they had a job at all. If a company cut benefits, too bad – that was the price for staying employed. What, precisely, do you get for those union dues; why bother to join one at all?

As a result, overall membership has now sunk to just 11.3 per cent of the US workforce, the lowest since the 1930s and the smallest proportion of any Western industrial country (in Britain the corresponding figure is 25 per cent, in Scandinavia, the most unionised place on earth, it's some 60 per cent.) In the private sector, unionisation here has plunged to just 6.6 per cent, compared to a peak of 35 per cent in the 1950s (when Detroit's motor industry, incidentally, ruled the world).

Of late, it has been the public-sector unions that have taken the battering. States such as Ohio and Wisconsin have passed laws limiting their collective bargaining rights. Others, faced by budget crises, have had to cut the guaranteed pensions and health benefits that increasingly made public employees the envy of their private-sector counterparts.

But now Chattanooga, and a chance for labour to claw back a little ground in the private manufacturing sector where once it flourished. Even if the UAW raises its flag at VW, things won't change overnight. But it would, surely, be a start.

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