

Volkswagen Chattanooga CEO Frank Fischer delivers the news. (Lydia DePillis)

CHATTANOOGA, Tenn. -- The United Auto Workers was dealt a stinging defeat tonight, with a majority of employees at a Volkswagen plant here voting against joining the union after a high-profile opposition campaign led by Republican politicians and outside political groups.

Company and union executives announced the outcome at a news conference at the plant, hours after polls closed. The results, still to be certified by the National Labor Relations Board, were close: With 89 percent participation, 712 workers voted no, and 626 voted yes.

The loss came in spite of an unprecedented level of support from the company being organized. Frank Fischer, CEO and chairman of Volkswagen Chattanooga -- who had encouraged the idea of starting a German-style "works council" at the plant, like those in place at Volkswagen's other factories -- even seemed saddened by the outcome.

“Our employees have not made a decision that they are against a works council. Throughout this process, we found great enthusiasm for the idea of an American-style works council both inside and outside our plant,” Fischer said, reading from a statement. “Our goal continues to be to determine the best method for establishing a works council in accordance with the requirements of U.S. labor law to meet VW America's production needs and serve our employees’ interests.”

The UAW reacted with ire at those who had pushed workers to vote against organizing the plant.

“Unfortunately, politically motivated third parties threatened the economic future of this facility and the opportunity for workers to create a successful operating model that would grow jobs in Tennessee," UAW Southern Region organizer Gary Casteel said.

Casteel was referring to anti-union statements by Tennessee's Republican lawmakers, who threatened to withhold tax incentives from Volkswagen if the workers unionized, and attention from D.C.-based activist Grover Norquist. At a press conference following the vote, UAW officials said that they started to notice workers start to turn against the union as they started hearing "threats and intimidation" against the company, and that they had not decided whether to pursue legal action because of it. But that was just the public campaign.

The worker-to-worker outreach, by contrast, was carried out by a dedicated core of anti-union employees who handed out flyers, voiced their opposition through a website and social media, and held a big meeting one Saturday to make their case. "It just spread," said Mike Jarvis, in a group gathered outside the press conference in the rain on Friday night, wearing blue T-shirts with a crossed-out UAW. "I told two people who told four people who told eight people, like a pyramid kind of thing."

What was the winning argument? Jarvis said people on the fence were persuaded by a clause in the Neutrality Agreement negotiated between Volkswagen and the UAW before the election, which established this as one of the principles of collective bargaining: "maintaining and where possible enhancing the cost advantages and other competitive advantages that VWGOA enjoys relative to its competitors in the United States and North America." In other words, keeping wages and benefits from getting too high relative to the already-unionized Big Three automakers in Detroit.

"Once we got people to realize they had already negotiated a deal behind their backs -- they didn't get to have a say-so in it -- they went ahead and signed the paperwork that this is going to happen as soon as we win the election," Jarvis said.



The clause in the VW-UAW "Neutrality Agreement" that might've made the difference.

Asked why that clause was included, UAW President Bob King said it was exactly the kind of innovation the union was attempting to bring to its organizing: Cooperation with companies to help them compete in the marketplace, not perpetual conflict. His full response is pretty illuminating.

Our philosophy is, we want to work in partnership with companies to succeed. Nobody has more at stake in the long-term success of the company than the workers on the shop floor, both blue collar and white collar. With every company that we work with, we're concerned about competitiveness. We work together with companies to have the highest quality, the highest productivity, the best health and safety, the best ergonomics, and we are showing that companies that succeed by this cooperation can have higher wages and benefits because of the joint success. Germany is a great example of that. Germany has extremely high wages, and is extremely successful because people work together. What I hope the American public understands is that those people who attack this are attacking labor-management cooperation. They don't believe in workers and management working together.

That's the pitch that's supposed to make companies more amenable to the idea of allowing their workers to have representation, though. The whole works council model is predicated on the idea that it helps management communicate with labor to reach more efficient and effective solutions to everyday problems.

But what if the prospect of too much cozyness with management spooks the workers themselves? Successful organizing campaigns need a scary opposition -- and there was no way to make Volkswagen into such a figure. "Volkswagen's a class act," sadi UAW Secretary General Dennis Williams.

The narrow loss throws into jeopardy the UAW's future strategy for organizing the South. It had already begun to apply a similar organizing model to a Mercedes-Benz plant in Vance, Ala., figuring that parent company Daimler might also be more willing to accept a works council -- now, there's little competitive pressure to do so.

The foreign automakers are a huge problem for the UAW. Over the years, they've exerted downward pressure on compensation and working conditions at the Big Three Detroit car companies -- while the Hondas and Nissans used to have to match union wages in order to attract workers, they've achieved enough of a critical mass to create their own market power.

"The balance of power in setting wages and benefits has shifted to the non-union sector," says Kristin Dzickek, a labor specialist at the Center for Automotive Research. "If they are bargaining for more of the work force, they can make more of an even playing field for labor costs."

Meanwhile, while the South's resistance to organized labor might be softening -- Tennessee itself saw the fastest union growth of any state in the country last year --local electeds can still be deeply skeptical of the union's political influence. Take Republican State Rep. Mike Sparks, whose district includes Nissan's 7,000-worker plant in Smyrna. His mother-in-law worked in the plant for 24 years and had 11 surgeries because of it, and he's frustrated at how the company has hired more temporary workers. But he doesn't want Nissan to unionize, and explains his conservative colleagues' opposition to the UAW in simple terms.

"The UAW does not donate to Republicans," Sparks said. 'That's one fear, let's just call it like we see it."

At the same time, many of the plant's workers are themselves conservatives -- and have started to wonder why the politicians who represent them oppose their right to organize. John Wright, 43, is a test driver at the plant and identifies as a right-leaning independent. He says he makes between $30,000 and $40,000 a year, and supports a wife and three young daughters. When Corker -- who takes more money from the securities and investment industry than any other -- came back to Nashville to voice his opposition to the UAW, Wright was puzzled.

"I can't for the life of me understand why the Republicans and big money are coming against us so bad. To me, they're attacking the average worker," Wright said, in the hours before the election results were announced. "To have politicians think that there's nothing more important than coming down and picking on the little guy because he wants a union, there's a national debt we've got to control, we have foreign policy things that we elect them to go up there to do, but you have to fly home for an emergency meeting because I want a union?"