Volkswagen AG and the United Auto Workers said they are in talks about the U.S. union's bid to represent workers at the German carmaker's Tennessee plant, which would be a milestone in the UAW's long-running effort to organize foreign-owned auto plants.
Volkswagen officials, in a letter distributed to workers at the Chattanooga, Tennessee plant on Thursday, said worker representation at the plant can only be realized by joining with a U.S. trade union.
"In the U.S., a works council can only be realized together with a trade union," according to the letter signed by Frank Fischer, chief operating officer and manager of the plant. "This is the reason why Volkswagen has started a dialogue with the UAW in order to check the possibility of implementing an innovative model of employee representation for all employees."
A UAW success in Chattanooga could alter the landscape in the U.S. auto sector, opening door to similar efforts at plants owned by Germany's Mercedes in Alabama and BMW in South Carolina, and possibly those owned by Japanese and South Korean automakers, industry watchers said.
"We may be on the verge of a truly historic moment," said Harley Shaiken, a University of California-Berkeley labor studies professor who sometimes advises UAW President Bob King.
"We're not only looking at the possibility of union recognition, a real milestone on its own, but a new model for organizing work in which the union plays a key role," he added. "The 'Chattanooga model' will be closely watched."
King has been trying to organize foreign-owned, U.S.-based auto plants to bolster union membership that has shrunk since its peak in the late 1970s. In the past, King called these efforts critical to the union's survival, although he has backed off that do-or-die stance.
King is open to what Fischer called "an innovative model" to gain worker acceptance at foreign-owned auto plants, which are primarily in the U.S. South, where unions are weak and organizing is more difficult due to state "right to work" laws.
"VW workers in Chattanooga have the unique opportunity to introduce this new model of labor relations to the United States, in partnership with the UAW," the UAW said in a statement on Friday morning.
The UAW has been working with the German union IG Metall to try to organize workers at the Volkswagen plant.
In March, IG Metall President Berthold Huber urged VW's Tennessee workers to choose the UAW to represent them, and VW board member Horst Neumann, who is also a member of IG Metall, said the company was in talks with the UAW about setting up a German-style labor board in Chattanooga.
The Thursday letter to the 2,500 Chattanooga workers was also signed by Sebastian Patta, head of human resources in Chattanooga.
On Wednesday, during a call about Volkswagen's U.S. sales, Jonathan Browning, head of the company in the United States, said: "We've been very clear that that process has to run its course, that no management decision has been made and that it may or may not conclude with formal third-party representation."
Browning also said that ultimately, the decision on whether to have third-party representation will be decided by Chattanooga's workers by a formal vote.
There was no indication in the letter to workers when such a vote would be held. A person familiar with the situation, who asked not to be identified, characterized the talks as more exploratory in nature at this point.
The UAW also confirmed that King met last Friday with VW executives and officials from the company's "global works council," which represents VW blue- and white-collar employees around the world.
The UAW said last week's meeting, "focused on the appropriate paths, consistent with American law, for arriving at both Volkswagen recognition of UAW representation at its Chattanooga facility and establishment of a German-style works council."
At VW plants, workers are represented by so-called works councils, which include laborers as well as executives who cooperate to determine issues ranging from company strategy to job conditions. They do not negotiate wages or benefits.
Volkswagen has about 100 plants worldwide, and all of them except for the Chattanooga factory and the company's six plants joint venture plants in China have such a council, an expression of the company's belief in what it calls "co-determination."
Previously, VW officials said the UAW may not be the union the workers choose to represent them in that case. The Tennessee workers could even form their own union, although that would not be a typical approach, said Ronald Meisburg, a former National Labor Relations Board general counsel and board member.
"In the U.S., you're either represented by a union or not," said Meisburg, now an attorney at a firm that represents employers. "U.S. labor law doesn't allow for much in between those two things."
Others said the issue is not so clear.
John Raudabaugh, a former NLRB member, noted that U.S. labor law requires union membership for collective bargaining about wages, hours and work conditions, although those topics can be discussed by employees who are not formally bargaining.
For instance, an employee could tell a manager that his company's pay lags the inudstry, said Raudabaugh, now a professor of labor law at Ave Maria School of Law in Florida.
"Unions find themselves at the end of the road, at the edge of the cliff, and they're desperate," he said. "What we need are new ways to approaching employee participation not new costumes on old skeletons."