UAW defeat in Chattanooga ought to be a wake up call for unions: This ain’t Germany

Updated Feb 24, 2014

Last week when factory workers at Volkswagen’s Chattanooga, Tennessee, facility voted against forming a union, the headlines characterized it as a “devastating” loss for the United Auto Workers.

The vote was fairly close, 712 to 626. If it were a football game this would be more like a score of 21 to 18. Hardly devastating. But what is curious about the drive is that Volkswagen actually endorsed the union’s gambit. Why? According to the Washington Examiner:

“The German company was under intense pressure from its union back home, IG Metall, to clear the way for the UAW. IG Metall was able to do this because European labor law gives trade unions considerable say in how companies are managed. Chattanooga was a test case to see if these international pressure tactics could work on other foreign companies with facilities in the U.S.”

Really? Does the UAW want to be more like Germany with strong trade unions? I think that would be great. But just so you know, there are a few differences.

For one, union leaders in Germany sit on the corporate boards of many of the companies where their members work. In other words, the union leadership is beholden to not just their members, but the board and stockholders too. Drive your company’s profits down with incessant and unreasonable demands and you’ll take full fiduciary responsibility. American unions have repeatedly shown that they don’t care about profits or productivity, only pay and benefits.

Two: union shop rules are notoriously resistant to change. Anybody who has ever tried to set up a trade show booth in Chicago knows what I’m talking about. Great insights might accrue if UAWs leaders would spend some time studying how Germany works. There they would find union leaders and rank- and-file members working in concert with management to find new and more productive ways to do things. Americans I know who have worked in Germany say the pressure to improve quality, productivity and processes is unrelenting.

If American unions want Germany’s union participation rates, they need to adopt Germany’s work ethic. Germany works because the unions understand that with the high level of rights there come a high level of responsibility. It’s that second part American unions ignore.

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The Mercedes plant here in Alabama and the BMW factory in South Carolina prove that Americans can build cars on par with the best German factories. From all accounts, the pay is good and the workers very satisfied. Could unionization improve that? Maybe a little. Could unionization–at least the way Americans practice it–ruin that?

One look at Detroit should be all the answer you need.

Unions can be a good thing, and in the United States unions should be offering innovative, progressive solutions to some of our most vexing skilled labor shortages. But unions that haven’t evolved in thinking, finances, philosophy or practices since FDR was president are doomed to fail. If they can’t win a rigged game like Chattanooga, can extinction be far behind?