VW Workers Escape From Detroit

Workers at Volkswagen’s sedan factory in Chattanooga, Tenn., soundly rejected a bid by the United Automobile Workers (UAW) to subsume them. In this the workers were considerably wiser than VW management, which took an officially neutral stance on the unionization effort but is in general kindly disposed to efforts to transplant the “workers’ council” model, with which it has enjoyed success at home, from Germany to its American operations. German automakers maintain a largely cooperative relationship with IG Metall, the main autoworkers’ union. But the UAW is a very different sort of beast, a fact not lost on the Chattanooga workers who handed it an enormously important defeat.

Competitive wages are part of the calculation, but they are far from a ruling consideration. The partisans of organized labor point out that German marques such as VW and Mercedes-Benz sell a great many cars and make healthy profits despite paying their comprehensively unionized work forces about two-thirds more than what the average American autoworker earns: roughly $67 an hour in wages and benefits for the Germans versus $40 an hour for a General Motors employee. (The frequently cited figure of $73 an hour for GM includes heavy retiree costs and does not reflect the compensation of active workers.) The U.S. labor camp takes precisely the wrong lesson from this situation: “Germany builds twice as many cars as the U.S. while paying its workers twice as much,” as one columnist put it. Another way of putting it: GM managed to go bankrupt while paying its workers just over half of what Daimler pays its own.

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