When a company is not fighting against a union, why do that union’s efforts fail — and what does that say about the U.S. model for labor?

Current management theory recognizes that businesses do better when employees are involved in decision making. But that trend ran smack into the paternalistic view that workers are replaceable parts in the narrow vote by workers at Volkswagen (VW) in Chattanooga, Tennessee to reject the United Auto Workers (UAW). Here was a case where right-wing politicians, who usually worship at the altar of business, decided that a business that actually valued its employees’ ideas was un-American.

In many ways what is remarkable about the vote of workers at a VW plant in Tennessee to reject the UAW was how close it was. Despite an aggressive campaign against the union by the state’s Republican leadership, if just 43 workers out of 1,338 had switched their votes, the union would have been voted in. The 626 workers who voted yes stood up to a campaign of intimidation by elected officials and right-wing organizations that threaten not just their jobs, but harm to communities in the rest of the state. When it is so much safer to say no, we should recognize the guts of the hundreds of workers who, by voting yes, declared that they deserved respect at their workplace.

The main motivation for even having the union vote in Tennessee was not what most people assume, which would be to increase wages and benefits. While wages at the VW plant are far from enough to put workers comfortably in the middle class, they are in line with wages paid to newly hired employees at plants represented by the UAW. In today’s era of diminished expectations by workers (and heightened ones by shareholders), VW workers in Tennessee were not organizing for a raise. Instead, they were calling for the establishment of European style works councils, which give workers a role in key decision making at the factory.

Works councils are common throughout Western Europe, and are often legally required at businesses with as few as five employees. Typically elected by all the workers at a business, including union and non-union members, the works councils join management in a range of decisions, including monitoring and enforcement of employment and occupational safety and health laws, setting work and production schedules, introducing new technology, and downsizing the plant. To facilitate their role, the members of the works council have the right to information about financial and business matters, employment levels and structural changes to the work environment.

Clearly, works councils would be a lot more revolutionary in U.S. businesses than voting in a union, because works councils establish a right to what was called in the early days of union organizing “industrial democracy.” They give workers a real voice at work. Companies like VW have found, in line with modern management theory, that giving workers a voice is good for business.

Organizing the Southern auto plants established by foreign auto companies over the past two decades is a top priority of the United Auto Workers. The auto companies were attracted to the South by a combination of low wages, workers with manufacturing experience, both laws and a political climate that discourage unionization, access to growing markets, and huge state-government tax incentives.  In 2008, Tennessee awarded VW a package worth $577 million to build the plant in Chattanooga, the richest package ever awarded to a foreign auto manufacturer at the time.

The UAW decided to try a new strategy in its organizing effort at VW in Chattanooga, based on establishing a works council. The councils operate at every VW plant in the world, except those in China and the U.S. However, under American labor law, VW cannot establish a works council on its own. When the National Labor Relations Act was enacted in 1935, it was common for employers to set up unions they controlled, as a way to block unions that would really represent the workers. To prevent company-controlled unions, the NLRA prohibited the kind of joint management-worker decision-making bodies envisioned by a works council. For the UAW, VW’s openness to a works council presented a new avenue for organizing.

While much has been made in the press about VW signing a neutrality agreement with the UAW, that act does not mean that VW’s American managers welcomed the union. Under the neutrality accord, VW rejected common anti-union practices among U.S. employers, like refusing to allow the union to speak with workers onsite, requiring workers to attend anti-union meetings and harassing union supporters. However, the UAW too made concessions, including agreeing not to meet with workers in their homes, which is one of the most powerful ways of building support and leadership for unions.

The main visible opposition at the factory came from salaried workers and low-level supervisors, who are not part of management but also were not eligible to vote in the union election, another barrier in American labor law. Mike Elk, who covered the vote for In These Times, reports many of these employees adopted the traditional view of American managers, that the union has no interest in producing quality cars and would interfere with corporate decisions. In the hierarchical American work culture, it is not surprising that workers who have been given some authority might be resentful of ceding some of their new power to a council that included hourly workers.

Still, the close vote made it absolutely clear that the deciding factor was the strident opposition of Republican U.S. senator Bob Corker, Republican governor Bill Haslam and Republican legislative leaders, who said that a vote for the UAW would scare other auto manufacturers away from Tennessee and dry up any more state support for expanding production at the factory. They made these threats even though GM announced this summer that it will add 1,800 jobs to a UAW organized factory in Spring Hills, Tennessee.

The vote in Chattanooga should be seen as another skirmish in the growing debate about the role of workers in driving the 21st-century economy. Southern politicians’ strong anti-union stance has roots in racist opposition to unions, which gave African-Americans a voice at work and better wages. Their virulent anti-union stance today continues the suppression of wages that has impeded the Southern economy from the days of slavery. But today, the Southern low-wage strategy has become a national model, led by the behemoth of Southern companies, today’s largest employer, Walmart.

The vote at VW highlights how the U.S.’s antiquated labor laws block economic progress. If the law allowed the establishment of works councils without the requirement that a union win a majority vote, it would provide a new vehicle to improve the performance and competitiveness of U.S. firms. The continued strength of many European manufacturers, even facing global competition from firms in lower-wage countries, demonstrates that giving workers a voice strengthens business. That lesson, a foundational assumption in the high-tech sector, makes sense for American manufacturers too. If our goal is to build an economy of broadly shared prosperity, giving workers a real voice in business decisions is a far better way to compete than slashing wages.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Advisor to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

Cross-posted from the Roosevelt Institute’s Next New Deal blog.

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

Photo: Dave Pinter via Flickr