Not much remains on Piquette Avenue in Detroit, Michigan, except a small museum. The car manufacturer Ford is exhibiting a few dozen classic cars here in a run-down industrial hall; visitors walk past them over creaking wooden floorboards. The exhibits include the world‘s first mass-produced vehicle, the Model T, which was once produced in these halls. The heyday of the 1910s and 1920s can only be glimpsed here. For decades, car manufacturers have located almost exclusively in the southern states of the USA. In the once proud Motor City, many halls are empty.
There is now great concern that the southern states will soon experience the same fate as Detroit in the north. They are currently losing one of the most important arguments with which they attracted the world‘s major car manufacturers to their region, including Volkswagen, BMW and Mercedes-Benz. In the South, corporations have always not had to fear influential unions. This kept wages low and therefore production costs.
But now the “United Auto Workers” (UAW), one of the largest worker representatives in the country, has achieved a historic success. At the VW plant in Chattanooga, Tennessee, the workforce voted by a large majority to unionize – for the first time at a foreign vehicle manufacturer. If the UAW has its way, the advance into the south should just begin. The states are now worried about their successful model.
also read
In the US media, UAW boss Shawn Fain has already said that VW is just the first domino to fall. The Volkswagen workforce, of all people, had proven to be particularly steadfast against the union in the past. The group is dominated by IG Metall in Germany and is unionized in all other plants around the world.
But in recent years, the UAW has failed twice in its attempt to represent workers at the Tennessee plant. This time, works councils in Wolfsburg put pressure on management to behave neutrally before the vote.
Now the next vote is coming up a few hundred kilometers further southwest. In the state of Alabama, at the Mercedes-Benz factory, thousands of workers will decide whether they want to be represented by the UAW. The activities of the UAW and the company’s behavior at the plant in Tuscaloosa are being monitored very closely, Mercedes works council boss Ergun Lümali, who is also chairman of the group’s global employee representative body, told WELT AM SONNTAG.
also read
“We are faced with a historic decision and our position is as clear as it is unequivocal: We encourage our colleagues in Tuscaloosa to make history by exercising their right to vote and vote to form a union.” After a successful election for the UAW, Tuscaloosa will become “Full member of the global workers’ representation,” said Lümali.
Voting lasting several days begins on May 13th. The chances for the union are good. Thousands of autoworkers have signed declarations of membership in recent months, the UAW says. Employee representatives are not only seeing popularity at Volkswagen and Mercedes, but also at the Hyundai plant in Alabama and Toyota in Missouri.
Source: Infographic WELT
This is a turning point for the southern states. Unlike in Michigan, the former center of the American auto industry, the unions in the South have always lacked influence. A main reason was the so-called “Right to Work” laws.
What sounds like a job guarantee actually means a lot more rules to limit the power of unions, say critics. The laws allow employees to be represented by the union without having to pay membership fees. The result: Only a few pay, the unions’ coffers remain empty – and therefore their influence is small.
The VW site in Chattanooga, Tennessee
Quelle: Elijah Nouvelage/Getty Images
Robert McNab has been studying the US labor market for years. The economics professor at Old Dominion University in Norfolk calculated the union effect: “In every state that you would classify as being in the southern United States, union density was below the national average,” said McNab.
In South Carolina, for example, it is only 2.3 percent instead of the nationwide eleven percent. The lack of influence of the unions is noticeable in salaries. While organized workers earn an average of $1,260 a week, non-member workers receive nearly $200 less. “From an economic perspective, lower union density and ‘right-to-work’ laws were a competitive advantage for the South,” McNab said.
Migration to Mexico
The sudden support for unions in the South is due to the UAW’s successes last fall. For weeks, auto workers had been on strike at several Ford, General Motors and Stellantis plants, the so-called “Big Three.” The UAW had predicted wage increases of up to 33 percent.
“We saw the big contract that UAW workers won with the Big Three, and that got everyone thinking,” said Zachary Costello, a trainer at VW in Chattanooga. Employees would see how the better salary and benefits would change their lives. “Once people see the difference a union makes, there’s no way to stop them,” Costello says.
However, there is great concern among politicians that their states could lose their competitive advantage as a result of the UAW’s advance. Six Republican governors from the South have therefore written an open letter. “The reality is that companies have a choice where they want to invest and create jobs and opportunities,” warn state leaders, who also include prominent governors such as Texan Greg Abbott.
Unionization would undoubtedly endanger jobs. The governors say they are saying what no one wants to hear: “We have seen it every time a foreign automobile plant was unionized. Not a single one of these plants is still in operation.”
also read
In fact, many car companies have moved to Mexico, where labor costs are even lower. Because the country is a member of the North American Free Trade Area, companies can easily supply the US market from there.
The company does not want to explicitly answer what consequences the formation of a union will have for VW’s business. However, in a statement it says that together with the UAW we are committed to a “strong and successful future at Volkswagen Chattanooga”. Other manufacturers are no longer so well-disposed towards the union: Ford will “think carefully” about where future vehicles will be built, said CEO Jim Farley in New York in February. The relationship with the UAW has changed significantly as a result of the recent strikes.
Experts like Harley Shaiken believe Southern automakers can compete in a unionized environment. “It is unlikely that any of the car manufacturers will close any plants,” says the labor economist.
After all, they invested billions of dollars in successful plants. “We will probably see more investment rather than less,” says Shaiken. Higher wages could ultimately lead to higher productivity, better quality and more innovation.
Here you will find content from third parties
In order to display embedded content, your revocable consent to the transmission and processing of personal data is necessary, as the providers of the embedded content require this consent as third party providers [In diesem Zusammenhang können auch Nutzungsprofile (u.a. auf Basis von Cookie-IDs) gebildet und angereichert werden, auch außerhalb des EWR]. By setting the switch to “on”, you agree to this (revocable at any time). This also includes your consent to the transfer of certain personal data to third countries, including the USA, in accordance with Art. 49 (1) (a) GDPR. You can find more information about this. You can revoke your consent at any time using the switch and privacy at the bottom of the page.
This has happened before, explains the economist, comparing the situation with the heyday in Detroit. Because Ford employees were dissatisfied after the introduction of the assembly line, company founder Henry Ford quickly doubled wages to five dollars per day.
The workers were more motivated to accept the new system. As a result, productivity increased dramatically, says Shaiken. And quotes a sentence to which he pins hopes for the southern states: “Ford said in his autobiography that doubling wages was the best cost-cutting he ever made.”
Here you will find content from third parties
In order to display embedded content, your revocable consent to the transmission and processing of personal data is necessary, as the providers of the embedded content require this consent as third party providers [In diesem Zusammenhang können auch Nutzungsprofile (u.a. auf Basis von Cookie-IDs) gebildet und angereichert werden, auch außerhalb des EWR]. By setting the switch to “on”, you agree to this (revocable at any time). This also includes your consent to the transfer of certain personal data to third countries, including the USA, in accordance with Art. 49 (1) (a) GDPR. You can find more information about this. You can revoke your consent at any time using the switch and privacy at the bottom of the page.