Roy Exum: VW: Do It And You Die

Wednesday, February 5, 2014 - by Roy Exum
Roy Exum
Roy Exum

The irony was eerie. As I sought out an online article that recently appeared in Forbes on the United Auto Workers' totally unwanted infestation of Chattanooga’s Volkswagen plant, an advertisement that preceded it included a sage business quote from George Crane: “There is no future in any job. The future lies in the man who holds the job.”

It just so happens I share that very belief with literally hundreds of thousands of Chattanoogans who view labor unions in general, and the UAW in particular, as the vilest of all cancers that could possibly invade our community. I have personally seen labor unions ruin people’s lives in Chattanooga and I’ll never forget it.

Put me down as one with the solid knowledge that if VW votes to accept the union as a “partner” in the three days of voting that will begin next Wednesday, the workers will most assuredly sign the same death warrant that shuttered VW’s ill-fated Westmoreland plant in Pennsylvania in 1988.

Please! Go look -- the 2,000,000 square-feet facility is still for sale today and the nearby communities are just as empty, both haunted by thousands of ghosts the failed unions promised before the UAW organizers left them behind. As somebody famous once said, “He who does not study history will be forced to relive it.”

Understand, I am old enough to vividly remember what unions did to kill almost all industry in Chattanooga. Argue it any way that you will but believe this -- I know and can recite what major manufacturers were here, why they left, why they never came back, and how many families and entire neighborhoods were decimated by the same false hopes, flagrant lies and impossible scenarios that cash-crazed strangers are now spouting to the formerly-grateful employees at the VW plant.

But rather than listen to my admittedly biased eye-witness account of how an unexplainably absurd belief in “the brotherhood” ruined the lives of so many co-workers who I had grown to love, let’s look instead at an article in the Wall Street Journal just two weeks ago. In it VW’s works council chief, a flaming unionist named Bernd Osterloh, totally embarrassed VW’s leadership when he spewed, “The situation in the U.S. is a disaster!”

Oh? Osterloh acted angry because Volkswagen sales in the United States have slumped and he pretends to blame bumbling management for its inability to recognize the U.S. market and understand the tastes of the American consumer. “The worm has to taste good to the fish, not the fisherman,” he said. “Sometimes I have the impression that it’s the other way around for us.”

Yet some analysts believe a major problem for VW is the quirky works council itself. There is the theory that one reason VW has yet to announce whether its new Cross-Blue SUV will be built in Mexico or Chattanooga is  because the union influence on the executive committee in Germany is holding up the project. The union activists, it is said, may be trying to leverage the company into accepting a UAW presence in Chattanooga before awarding such a sweet plum that would – get this -- double the workforce here and – bingo! -- double the cash-strapped union’s take in dues with an influx of new employees.

To be candid, Volkswagen is indeed suffering in a strong U.S. market and to wittingly invite a new disease couldn’t come at a worse time. In 2013 Ford led U.S. sales with a 9 percent increase and 2.5 cars and trucks sold. General Motors, Toyota and Honda each posted 7 percent sales gains in the United States, GM selling  2.8 million cars and trucks, compared to just over 2.2 million for Toyota.

At the same time VW sold only 407,704 units in the U.S. and desperately needs new models to challenge Toyota as the top producer globally, a goal VW executives have vowed will be reached by 2018. Toyota led the world in total sales for the second straight year in 2013, selling 9.98 million, compared to 9.1 million at GM and 9 million worldwide by VW. 

As you can see, the pressure on Volkswagen to greatly increase its stake in the United States is paramount and the UAW is every bit as desperate. Rank-and-file membership has plunged from 1.5 million in 1979 to less than 400,000 today and, with Detroit still rusting, the drowning union needs to win in Chattanooga next week.

It will be the first vote at an assembly plant in 13 years, this since Nissan employees in Tennessee voted two-to-one to ban the union. Trust me on this: the UAW effort is being closely monitored by the entire industry and for good reason.

Cars made by General Motors, Ford and Chrysler – built by union plants – each carry an estimated $2,500 of union costs imbedded deeply in the sticker price while comparable foreign models, built in the United States but by non-union employees, carry the same amount in true value to the customer.

That is one reason why Toyota’s Camry has been the best-selling car in America for 12 straight years. A Chattanooga-built Passat hasn’t been able to compete with a Camry in the marketplace because of engineering and quality -- any fool that soon saddles the VW model with $2,500 in union benefits will almost assure the Chattanooga Passat with inevitable doom.

State and local leaders, from Governor Bill Haslam to the Chamber of Commerce’s Ron Harr, are pleading that the union be repulsed, fearing not only the grave consequences that may follow but convinced America’s anti-union business climate will hurt the state’s efforts to lure more industries to Tennessee. Union popularity is falling, this due to the recession and public-sector wages and benefits, and – believe this -- many who now work at VW under Tennessee’s right-to-work laws hardly want to pay monthly dues.

Union sympathizers insist this is a new approach, the worker’s council instead more of a “world union” where the workers will help manage problems and make improvements but Osterloh’s harsh comments give a far more unsettled feel for Germany’s politically-correct and discreet corporate culture. In response, a company spokesman told a reporter the decision of where the new SUV will be build “will be made when all the parameters are in place,” lending to the belief VW’s problems in America are not nearly as much a “disaster” as the zany works council appears to be.

Next Wednesday, VW employees in Chattanooga need to circle the wagons, not daring let the United Auto Workers inside that parameter. If by chance or by horror the UAW gets inside the VW plant, history will show the result will eventually be terminal.

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