Labor and Management Have Nothing in Common

Stephan Krull

The UAW based its campaign to unionize Volkswagen around the German labor movement’s “social partnership” model. It was the wrong approach — and ended in disaster.

Pro-union VW employees on June 11, 2019 in Chattanooga, Tennessee. Chris Brooks / Twitter

Interview by
Chris Brooks

The United Auto Workers just suffered its second major defeat at Volkswagen.

It’s a strong reminder of how far this once-mighty union has fallen. At one time, the UAW was in a position to set and enforce standards across the entire auto industry. Under these conditions, not one of the Big Three automakers could lower wages or cut benefits in an attempt to gain an advantage over their competitors.

Today, standards for unionized autoworkers have sharply declined following decades of concessionary bargaining and steep competition from the surge of foreign-owned nonunion automakers that set up shop below the Mason-Dixon line.

It’s a vicious cycle: the Big Three demand concessions to remain competitive with foreign automakers and those same foreign automakers weaponize those concessions to convince nonunion workers of the union’s weakness.

So if the union hopes to protect what remains of its membership and contracts, much less seize new ground, it is imperative that it organizes the South.

UAW leaders assumed they had the best shot at the Volkswagen plant in Chattanooga, Tennessee — the company’s sole US manufacturing plant. Their reasoning was that German employees have perceived structural power within the highest reaches of German corporations.

Under German laws, employees have a right to “co-determine” the companies they work in through the election of employee representatives to works councils and the company’s board. Works councils act a vehicle for white- and blue-collar non-managerial workers to have non-confrontational meetings with management where they make collective decisions regarding their immediate workplace. Workers representatives also constitute 50 percent of the employer’s board, even of massive global corporations like the Volkswagen Group, which comprises twelve distinct brands (such as Bentley, Lamborghini, Ducati, and Scania) and is the world’s largest automaker.

The UAW leaned heavily on their German allies in the Global Works Council and IG Metall, the largest union in Germany, in the hopes of importing the German model of “social partnership” to the United States.

That didn’t happen. The UAW has run two plant-wide elections, one in 2014 and another in 2019. Both failed.

In 2014, German unions and works council representatives were successful in helping the UAW reach an election agreement that kept the company ostensibly neutral in the lead-up to the vote. Tennessee politicians and business-funded astro-turf groups were happy to pick up the fight and launched an intensive aerial war against the union’s efforts.

In 2019, the union had to face down not only the politicians and corporate front groups, but Volkswagen as well.

Rather than being an independent, militant force against corporate power, the UAW has spent decades fostering a deep organizational commitment to labor-management partnership schemes. These schemes not only reduced the union to playing a junior partner in management’s strategies for increasing productivity and efficiency, but opened the door to corruption. It was this commitment to “jointness” that led to the creation of Big Three training centers, where production and maintenance workers improve their job skills to “enhance competitiveness.”

And it was the UAW’s ideological commitment to partnership that led it to fully embrace the German model of social partnership.

Labor journalist Chris Brooks interviewed Stephan Krull, a retired autoworker and IG Metall activist from Volkswagen’s flagship plant in Wolfsburg, Germany where he served for many years on the plant’s works council, to discuss why the UAW’s German allies were unsuccessful in reining in American management and what the anti-union turn in the US factory means for the German social model.

Chris Brooks

162 skilled trades workers at the Chattanooga plant successfully organized a union in 2015 and the company spent four years refusing to bargain with them, in violation of both US labor laws and their internationally recognized human rights. Are German unionists aware of the human rights violations taking place at Volkswagen in the United States?

Stephan Krull

German trade unionists are well aware of the human rights violations at Volkswagen in the United States. The chairman of IG Metall is also on the board of IndustriALL, the global trade union federation. IndustriALL canceled the global framework agreement it had voluntarily negotiated with Volkswagen in response to the company’s anti-union campaign in Chattanooga.

Due to market saturation and the highly competitive nature of the auto industry, there is a lot of economic pressure on the works council in the German plants and it is a concern that protecting jobs in their plants will take priority over labor solidarity. However, union activists are still publicizing the situation in Chattanooga, for example on Labournet and in international meetings.

Chris Brooks

It does not appear that the cancellation of the global framework agreement had any impact on Volkswagen. The company continued to refuse to bargain with the skilled trades unit — until the UAW abandoned it altogether in 2019 and pushed for another plant-wide election in April.

During the most recent union election, Volkswagen management publicly claimed neutrality towards unionization while privately running an intense, scorched-earth anti-union campaign full of threats and intimidation.

I was scratching my head reading the letter that top Global Works Council representatives Bern Osterloh and Johan Järvklo sent to UAW members in Chattanooga on June 6 saying they had spoken with management had received assurances that the company was going to be neutral.

The week prior, newly reinstalled Volkswagen of America CEO Frank Fischer led mandatory plant-wide meetings in which he insinuated that the UAW was to blame for the 1988 closing of Volkswagen’s prior plant in Westmoreland, Pennsylvania and implied that a similar fate could happen in Chattanooga if workers voted for the union.

And the week after they sent the letter, Fischer held more mandatory meetings in which he slammed the UAW and made the bizarre claim that the Chattanooga plant was the “most democratic” in the world — including unionized plants with works councils in Germany.

So the Global Works Council’s letters seemed very weak to me. They said management promised that “any attacks of democratic rights of the workforce to influence the election will not take place again.” However, those attacks were actively taking place. And the letter didn’t state what consequences there would be, if any, if management continued to violate workers rights.

Stephan Krull

The termination of the Social Charter by IndustriALL actually does not impress Volkswagen. However, this must also be a lesson for all unions in the future. Corporations are only “social partners” as long as they can thereby increase their profits.

If profit can be better increased without “social partnership,” and if political conditions permit, then management will always wage class struggle against workers and against unions.

Chris Brooks

Would any of the behavior I cited above ever be accepted in Germany?

Stephan Krull

Such behaviors would never be accepted in Germany, they violate German laws and ILO standards.

Chris Brooks

In your view, has the Global Works Council been compromised by the diesel scandal?

Stephan Krull

The works council has unfortunately stood behind the company’s criminal management. An opportunity was missed here, and the temporary weakness of management was not used to strengthen the positions of the trade unions.

Management was so weak that for a time the chairman of IG Metall, then Berthold Huber, became the acting chairman of the Supervisory Board of the Volkswagen Group. He didn’t use the opportunity to undertake a single initiative to expand union rights.

You’re right, the letter from Osterloh and Järvklo is very weak because they do not really want to mess with management. American management in Chattanooga would not be taking any of these actions against the UAW without backing from Wolfsburg.

I think the company was trying to play it both ways: If management’s anti-union campaign is successful, then it will claim a “democratic election” had taken place and should be accepted. If the UAW was successful then it would claim that the works councils had been working with the UAW and the company was neutral. Either way, management is absolved from blame.

Chris Brooks

What do you mean when you say that the economic pressures on the works councils in the German plants is very strong?

Stephan Krull

The car industry and also Volkswagen are in a deep crisis. The old business model is exhausted and, apart from China, the markets are saturated.

Demand in the global market is declining, which has led to murderous competition. So for IG Metall and the works councils, securing auto worker jobs is their first priority. For management, it is the continued creation of large profits.

This creates inevitable tension and confrontation between the works councils and unions on one side and management on the other. Every year, workers have to fight the company to keep product from being relocated from one factory to another and moved from one country to another.

Now a new agreement has been reached, called “digital transformation roadmap,” in which the company will invest €4 billion to have fewer jobs performed manually and more jobs preformed by IT. This will result in the eventual reduction of four thousand administrative jobs and the reduction of 250 places for vocational training. Overall, over the next few years, the Volkswagen Group will reduce its workforce by more than thirty thousand jobs, primarily through voluntary redundancy, with severance payments or for reasons of age. For this, the company has “guaranteed” not to lay off workers for operational reasons until 2029 in the German VW plants — insofar as this can be guaranteed under capitalistic conditions.

The competition between factories and between companies is relentlessly used to force the works council and the union to make concessions. And if the works council and union have no idea for a different future and if they do not have the courage to fight for that other future, then the corporation is always the winner.

Chris Brooks

What were the reactions in Germany to the news that the UAW lost in Tennessee?

Stephan Krull

In some newspapers the message was short but clear: The union has lost because VW workers in Tennessee do not want union representation — for example, in Der Spiegel — completely ignoring that almost half of the employees voted for the union despite the lies and threats from VW plant management and even reiterated the company’s claims to being “neutral.”

The report also ignored the fact that half of the workers are being denied the basic human right to collective trade union representation under both the United Nations Convention on Human Rights and the International Labour Organization’s Conventions.

IG Metall Wolfsburg issued a statement which read: “We would all have wished for a different outcome, but given the unprecedented anti-union campaign that Chattanooga’s colleagues have been exposed to in recent weeks, the result is worthy of honor.”

The union’s statement fails to identify VW management as being responsible for the anti-union campaign, lacks any conclusions about how it failed to use its position in Germany to adequately protect our colleagues in Chattanooga, and fails to mention that any solidarity that did come from IG Metall was too little too late.

In the left wing of the labor movement here, the result has been noted with great indignation.

Chris Brooks

Will there be any kind of a stronger reaction from IG Metall and the works councils to what happened in Chattanooga?

Stephan Krull

It is unlikely that there will be a strong reaction from IG Metall or the works council. Jörg Hofmann, the chairman of IG Metall, reacted very late and ambiguously. He absolved the management in Wolfsburg of responsibility by pointing out that there was the instruction from the corporate headquarters to behave strictly neutral. These instructions were given after Chattanooga management had been campaigning for weeks against the union, going so far as to invite the Tennessee governor to the factory to lead a mandatory anti-union meeting, as you reported.

And then of course, there were the lies and threats from Frank Fischer before IG Metall pronounced the company was neutral and after.

Both IG Metall and the works council are in a defensive position now because of everything that is happening in Germany: digitization is sweeping the auto industry, resulting in the reduction of jobs; enterprises are terminating their collective agreements; social rights have been eroded by anti-worker governments for the past twenty years; and the industry has been hemorrhaging jobs and therefore union members.

Put that all together and you can see that the labor movement in Germany is in a deeply weakened position.

Chris Brooks

Isn’t Volkswagen management’s ability to wage a brutal anti-union campaign in Chattanooga an indictment of the German social model of labor-management partnership?

Stephan Krull

The attacks by the Chattanooga management are also a massive attack on the works council and IG Metall. It’s an attack on the union and employee representations in all locations all over the world. It’s a refutation of the political and social rights of all Volkswagen employees. That is why all Volkswagen unions and employees have to collectively defend one another.

The attacks by management in Chattanooga show that corporate management does not attach any importance to “social partnership” unless they are forced to do so.

As you reported, Johan Järvklo, the secretary general of the Global Works Council and a member of the company’s Supervisory Board, came to Chattanooga to be an election observer and Chattanooga management denied him access to the factory to speak with workers. This is an unbelievable affront. The Supervisory Board is the top board in the company. What possible justification is there for denying a board member access to one of the factories he is responsible for overseeing?

The situation is particularly dramatic because Jörg Hofmann, the chairman of IG Metall, is also the deputy chairman of the supervisory board. Due to Germany’s Co-Determination Act, union and employee representatives have half the seats on the supervisory board. So they have ten of the twenty seats. The union and employee representative could take a vote of no confidence and dismiss the board. Two representatives of the state of Lower Saxony (a social democrat, a conservative) also have a supervisory board mandate and could vote with the employee representatives.

But there will be no such conflict, because IG Metall continues to hope, over and over again, to find compromises with the management by meeting with them “at eye level.” The union’s leadership has more interest in continuing the current arrangement than in deepening the conflict with management.

This was also the union’s approach during the Dieselgate crisis. IG Metall issued a flyer and distributed T-shirts that said “IG Metall and Volkswagen — one team, one family.” This is the message that management hammered on to the workers in Chattanooga to defeat the UAW drive. Well, it’s the same message that the union is clinging to in Germany in the hopes of saving as many jobs here as possible.

Chris Brooks

So is co-determination and the German model of social partnership a failure?

Stephan Krull

On the one hand, social partnership has always been an illusion. Power relations in capitalism do not allow for real labor-management partnerships: the owners continue to decide, what, when, where and how much is produced.

On the other hand, there was a class compromise following the defeat of capital-sponsored fascism in Germany and the systemic struggle between socialism and capitalism, between East Germany and West Germany.

The social partnership illusion is now bursting because the rivalry between these two economic systems no longer exists. Capital is less dependent than before on compromises and concessions. The result is that co-determination is being eroded for workers and management simply chooses to forgo co-operation with the works council without consequence and without loss, as the events in Chattanooga prove.