Volkswagen and the United AutoWorkers (UAW) in Tennessee
This business case looks into the an issue between giving workers a voice through unionized labor and the potential business impacts that it brings. Volkswagen is putting up a state-of-the-art manufacturing facility in an area of the United States that many consider to be very averse towards unionized labor. It is very peculiar to know that this kind of business issue has been around for more than 40 years and has remained complicated, unresolved and still highly detrimental to the United States’ manufacturing industry and the country’s economy in general.
UAW’s strategy is to enter the non-unionized foreign-owned manufacturing facilities that are locating in the American South. Tennessee has implemented regulations that disable unions to organize laborers thus making Tennessee one of the union-free states in the country. On the other side of the spectrum, Volkswagen is a company that historically embraces unions. As a matter of fact, Volkswagen has employed a democratic labor strategy that follow’s Germany’s pro-labor stance. This position has helped Germany become a leading industrial force in the world today.
The case provides four possible recommendations to move this case forward. The first is to allow the union to develop and then live with whatever the state legislation allows the union to do. The second option is to allow the union to develop and lobby for the state to allow the company to manage its affairs (independent of state legislation). The third option is to threaten legislators and state that the company will move out of Tennessee if the company is not allowed unionized labor. The last recommendation is that of actively opposing the creation of a union.
As consultant, my recommendation is the second option. I would recommend for Volkswagen to allow the union to develop and lobby for the state to allow the company to manage its affairs (independent of state legislation). The reason why I am recommending this is because Volkswagen has a long history of effective labor relations and cooperation with unionized labor in their mother country. Germany can allow unionized labor in its manufacturing facilities under the condition that the union is styled as an elected “work council”. Because the representatives of the employees are voted and carries the mandate of the workers to be their voice, Volkswagen can recognize this mandate and provide these workers the right to participate in all management decisions that would impact the working conditions of laborers.
This approach is starkly different from what American labor unions are accustomed to. In the United States, labor unions directly oppose decisions which they feel are too biased against workers, thus earning a reputation of having inclinations towards socialism. Volkswagen’s system of giving employees a voice within the managerial power house may seem to be “puppeterring” at worst, but given a chance, this may be the closest laborers will have to actually having people that are thinking of their welfare within the corporate power circle. The effectivity of this approach therefore hinges on the capabilities of the people voted into this position.
This approach may circumvent the existing legislation and may even set a precedent that may be against what politicians from the southern parts of the United States would not like or support. However, I think it is high time for the United States to embrace policies and practices found in other countries that contribute to actual economic growth and people welfare.
The idea of bringing in employees and giving them an active voice and participation in the management of a corporation moves laborers from just being a resource, to a position where they receive recognition and some kind of “ownership” over their contributions to the company. This kind of participatory environment is certainly better than the go-against-the-Man approach that American unions seem to champion.
