Volkswagen and the UAW: Will Republicans Still 'Get Government Out of the Way'?

This post originally appeared at Daily Kos.

It's a common refrain among conservative economists and politicians: If only government would end its interference in the affairs of private enterprise, the efficiencies of the free market would buoy the economy, lead to high profits and in turn result in higher wages for everyone. This argument is used to defend corporate-friendly policies of all stripes, including deregulation, opposition to living wages and worker safety protections.

While conservative governments have strong objections to imposing rules and regulations on employers, however, they have no problem setting stringent rules and regulations on the labor unions that seek to represent the interests of workers. The most usual imposition of regulations on labor comes in the form of so-called "right to work" laws, which forbid labor unions from requiring dues from the workers they represent. Ultimately, the objective of these laws is to defund unions by allowing represented employees to get away with being "free riders"—thus weakening their position across the bargaining table as well as making it harder for labor to compete in the political marketplace of ideas.

Ultimately, the objective of conservative governance is to give every advantage possible to employers while simultaneously restricting the rights of employees to organize or redress grievances. And in an economic system where corporations and employee associations have traditionally antithetical and combative relationships, these two principles go hand-in-glove. But what happens when Republican ideology has to confront a new paradigm: one of intentional cooperation between employers and workers that seeks to improve efficiencies and ensure that everyone enjoys the profits of productivity? Hint: Intellectual consistency shouldn't be a first, second or even a third choice.

In 2011, Volkswagen opened an assembly plant in Chattanooga, Tennessee, continuing a trend of automakers choosing to build plants and facilities in the South to take advantage of the possibility of cheap labor and government hostility towards labor unions. But Volkswagen is a German company, and they do things a little bit differently from their American, Japanese and Korean counterparts. See, European companies are governed by the European Works Council Directive, which requires that workers be given the right to consult on management decisions at larger multinational companies in the European Union.

According to the United Auto Workers, every major manufacturing plant for Volkswagen has representation at the company's Global Works Council, except for the recently opened plant in Tennessee—a fact which did not sit well with the company's worker representatives. This dissatisfaction led to discussions about creating a works council in Chattanooga. But because of the particularities of labor law in the United States, creation of such a Works Council would require the participation of an actual labor union. The most natural fit? The UAW, of course. And how are Tennessee's Republicans reacting? Why, just about how you'd expect at the mention of a union having a prominent role in their state.

Tennessee Gov. Bill Haslam said Friday that some auto suppliers considering moving closer to Volkswagen's Chattanooga plant may balk if the United Auto Workers succeeds in unionizing the factory.

"[VW] wants more suppliers closer to them. We've worked really hard to do that. A lot of those suppliers are saying, 'If the UAW comes into the plant, I don't know if we'll be as close as we would,"' the governor said.

Haslam, speaking to Times Free Press reporters and editors, said business recruitment to the state is being hindered by the UAW's organizing efforts at the plant.

"I've had several folks recently say that if the UAW comes, that would dampen our enthusiasm for Tennessee," he said. "They feel like, 'We're looking at Tennessee because it's a right to work state.'"

These comments were at least somewhat measured in tone and content. The same, however, cannot be said for the comments of Republican Sen. Bob Corker:

“For management to invite the UAW in is almost beyond belief,” Corker said. “They will become the object of many business school studies—and I’m a little worried could become a laughingstock in many ways—if they inflict this wound.”

Corker, who played a large role in persuading Volkswagen to build its lone U.S. assembly plant in the city where he was once mayor, said he hopes the company pulls back from its decision to engage in talks with the UAW.

“We’ve talked to management, and to me it’s beyond belief that they’ve allowed this to go that far and displayed this kind of naivety that the UAW is somehow different than they were years ago,” Corker said.

Now, keep in mind that Volkswagen, far from sputtering because of its close relationships with its workers, surpassed both General Motors and Toyota in annual profit in 2012. And yet, Gov. Haslam has seen fit to try to tell one of the world's most successful companies how to run its business, while Sen. Corker has taken the bold step of insulting one of his state's best-known employers by calling it a "laughingstock." Fortunately for the workers, they saw things differently: A majority of workers at the plant have now signed cards favoring UAW's representation in creating a European-style works council at the plant to provide the workers a voice in issues like job security and working conditions.

On one hand, this story is notable because it shows that Republican politicians have absolutely no problem telling private companies what to do when it suits their ideology. But even more importantly, the creation of a Works Council system in one of the most unexpected places in the country is introducing a new paradigm into the labor movement where workers and management work with co-determination and collaboration to ensure a positive result for all stakeholders. And the last thing Republicans want is for that to spread—especially through their precious "right to work" territory.