Jackson Jambalaya

The UAW failed to capture the workforce of a Volkswagen plant in Chattanooga recently.  Hard to believe: workers were paid at the plant more than new hires under union contracts at the Big 3 so they voted against the union.  John Schnapp writes in the Wall Street Journal about Nissan's experience with unions when it opened its first American plant in Smyrna:


The election defeat by the United Automobile Workers last week at Volkswagen's  three-year-old Chattanooga assembly plant had its roots in a windowless, smoke-filled Tokyo conference room in October 1980. A group of young, midlevel Nissan  managers had gathered to plan what would become the first successful full-scale, foreign-owned auto plant in the United States. Nissan and other Japanese auto makers are unionized, and the Nissan managers initially expected to welcome the UAW. They came to change their minds.....

And so, thanks to political pressure by Detroit auto makers and the UAW, the United States government forced Japan into a "Voluntary Trade Agreement" in 1978. Japan agreed to freeze car shipments to the U.S. for three years. This was advertised as an opportunity for Detroit to "catch up"—which of course it couldn't and didn't and didn't much want to if it meant ditching its long-cultivated orientation to speed, size and power.

For the Japanese, not yet a magnum force in global auto making, the agreement was a chilling surrender and induced fears of worse to come. The leading auto makers in Japan each reacted according to their corporate cultures. Nissan, the weakest but most aggressive of the three, decided to build a full-scale assembly plant at Smyrna, Tenn., with the capacity to turn out 200,000 vehicles a year.

Nissan engaged my consulting firm, then called Temple Barker & Sloan—I was the partner in charge of its automotive practice—to help its planning team with some critical issues. One was to warn them against repeating Volkswagen's experience in 1978. VW had acquired an abandoned Chrysler plant at New Stanton in western Pennsylvania. Whatever could go wrong did, especially the decision to transform the company's world-accepted Golf subcompact into a disastrous "Americanized" version called the Rabbit.(KF note: Plant was bedeviled by numerous wildcat strikes.)

We also developed for the Nissan planners a comprehensive, frequently heroic history of the UAW, and we highlighted its policy of demanding identical wages, hours and working conditions terms from all of the Detroit auto makers, regardless of their economic abilities.

Nissan had assumed that unions in the United States were much like those in Japan, where the national confederations are relatively weak and each company's collective-bargaining unit collaborates with management to strengthen competitive position and prestige. When we explained that America's labor-relations system was deeply and fundamentally adversarial, they were incredulous. They questioned whether the Motown model was true, and if so, what that meant for Nissan policy. Ultimately, they came to realize that Nissan would have to abandon its hope of fostering a Japanese kind of union at Smyrna. It would be the UAW or nothing. They persuaded their bosses to choose nothing.

Nissan's Smyrna plant, which commenced production on June 16, 1983, was designed to be worker-friendly. It was light and airy. No top executives had reserved parking spaces. Everyone, including the bosses, wore identical workfloor clothing. There was no executive dining room.

We also suggested bringing groups of Smyrna hires to Japan to work side-by-side with Japanese counterparts for four to six weeks on the assembly line. The idea was to enable the Americans to absorb Nissan's notions of quality assurance, which empowered any worker to stop the line if he perceived a quality problem. We didn't expect that this costly recommendation would fly. But Nissan embraced it enthusiastically, bringing the entire Smyrna first shift to Japan in relays.

Many of the people had never been outside of Tennessee. The trip accomplished its primary purpose, and it also generated an uncommon degree of enthusiasm, sense of affiliation and many trans-Pacific friendships.

The UAW undertook several early and determined efforts to organize the Smyrna plant; all of them struck out. It made an attempt to organize Honda's plant in Marysville, Ohio, but stopped short of holding an election. Essentially all of the employment growth in the U.S. auto industry since 1980 was in nonunion plants while the UAW's membership has shrunk to fewer than 400,000 from 1.5 million in 1979.

Last week the union had an unusual opportunity in Chattanooga. Volkswagen executives expressed an intense desire for a works council at the plant. German-style works councils bring together representatives of blue collar, white collar and management employees, a sine qua non feature of the Germanic playbook for effective industrial cooperation.

A works council might not be replicable in the United States unless a union of production workers existed to select its blue-collar representatives. VW wanted a works council and assumed a union to facilitate it. The UAW applauded the works-council notion, but in reality its goal was a conventional collective-bargaining unit of dues-paying members that might give them a boost toward organizing other auto makers in the South, especially BMW  and Mercedes.

A majority of workers in VW's Chattanooga plant had signed "card checks," but the UAW hung back from a true election. Card-checks are frequently signed after intimidating one-on-one encounters between paid union organizers and workers, but then subsequently disavowed in secret balloting.

Instead the union bet that VW's desire for a Chattanooga works council might be intense enough for it to induce employees to vote for the UAW. The company assumed what it considered a legally unbiased stance, one expressed in a 15-page "neutrality contract" with the union. But it was a stance with a decidedly pro-union tilt. It gave UAW organizers unusual in-plant access to the workers and placed considerable constraints on anti-union campaigners, generating clear signals to its workforce.

The UAW still lost. The final count of 712 to 626 was close, considerably closer than any of the decades-ago elections at Nissan Smyrna.......

The results, though, will probably stand. VW may be disappointed but its factory will be largely unaffected. Some legal scholars are already exploring the issue of whether a union really is required for organizing a U.S. works council. They may even conclude it isn't.

Union leaders have not given up on the South. On Tuesday Richard Trumka, president of the AFL-CIO, told this newspaper that "We continue on. That was just round one." That may be cold comfort for the UAW. Now, as in the wake of its defeats in the 1980s, it has to struggle with "what next," and the bleak prospect of another long drought. column