Volkswagen’s Troubles Continue Following Partial Unionization of Tennessee Plant

Skilled tradesmen, including electricians and repair workers at Volkswagen’s only United States manufacturing plant in Chattanooga, Tennessee, have voted to unionize with the United Auto Workers.

The group of about 160 workers authorizing collective bargaining represents the first time that a foreign automaker has unionized in the United States. In early 2014 the overall plant of approximately 1500 manufacturing workers voted down a proposal for collective bargaining. There are some indications that the UAW will use the partial unionization of the plant to expand their representation to the overall workforce over time.

Japanese, Korean, and European carmakers along with a vast array of suppliers have revitalized the manufacturing sector of America’s southern states, with Volvo the latest auto company to open a plant.

These companies have enjoyed success with an up-to-this-point non-unionized workforce, in stark contrast to the moribund economy of unionized Detroit. Although the UAW has failed to unionize other plants, they will surely redouble their efforts based on their success at Volkswagen.

The news couldn’t have come at a worse time for VW,which has faced a series of serious setbacks in the latter half of 2015. The clean diesel scandal centering on Volkswagen’s use of “defeat devices” on emissions testing has continued to get worse. The company is facing severe penalties not only in the U.S. and Europe, but potentially in other markets such as Asia.

Beyond their problems with the government, they are also feeling the pinch with customers. VW sales dropped 25 per cent in November, directly attributed to the diesel engine problems by industry watchers.


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