Volkswagen's Union Defeat -- Review & Outlook, The Wall Street Journal

Workers prove to be smarter than their bosses in Tennessee 

The decision by workers at the Volkswagen plant in Chattanooga, Tennessee to reject the United Auto Workers is the best news so far this year for the American economy. Even with Volkswagen management on its side, the union that combined with CEOs to nearly ruin U.S. car makers couldn't persuade a majority voting in a secret ballot to let it become their agent to bargain with the foreign-owned company.

This wasn't merely one more failed union organizing attempt. The UAW and its chief Bob King spent years working toward this vote as part of its strategy to organize plants in the American South, and all the stars were aligned in its favor. 

Mr. King colluded with IG Metall, Volkswagen's German union, to neutralize Volkswagen management. It pitched the collaborative vision of a labor-management "works council" at the plant that makes the VW Passat, and it claimed to have learned its lesson from the confrontation and strikes that hurt Detroit's auto makers. Volkswagen management gave the union the run of the plant to lobby workers while denying similar privileges to union opponents.

So it's nothing short of remarkable that the union couldn't make the sale. The failure reflects how well the plant's workers are doing without a union, to the tune of $27 an hour including benefits. The defeat also speaks to the harm the UAW has done to itself by driving GM and Chrysler to bankruptcy and pushing companies like Caterpillar to move new production from union plants. 

 These columns have long argued that a company organized by a union usually deserves what it gets, but most workers understand that the modern union offer is often a Faustian bargain. The UAW may be able to negotiate a near-term increase in pay and job security for current workers. But the price—in addition to the steep coerced dues—is usually a less competitive company that means less security and fewer jobs in the long run. The best proof is the UAW itself: It has lost 75% of its members in 35 years as its demands and work rules made their employers less competitive.

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