Workers at the Volkswagen plant in Chattanooga have taken steps that almost assure they will become part of the United Auto Workers (UAW). The move could not come at a worse time as the German car maker faces its largest challenge in decades due to an emission fraud scandal.
If the UAW victory, as expected, survives an appeal by Volkswagen to the National Labor Relations Board, the 164 skilled trades workers will be the first foreign-owned auto assembly plant workers to gain collective bargaining rights in the southern United States.
The milestone comes just days after VW announced that its sales in the United States collapsed last month. On Tuesday, the company said:
Volkswagen of America, Inc. (VWoA) today reported sales of 23,882 units delivered in November 2015.
The November sales results reflect the impact of the recent stop-sale for all 2.0L 4-cylinder TDI vehicles as well as for the 3.0L V6. The voluntary stop-sales were issued in light of notices received by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) regarding emissions compliance.
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VW sold 31,725 vehicles in November of last year. The figure puts its market share at 2% in the United States. By contrast, its share of the European Union market is 25%.
In theory, the UAW eventually will lead to collective bargaining, which could raise wages and benefits, which in turn would cut margins for the company in the United States. Based on the VW scandal, it might be better to predict that huge financial losses created by the debacle will be deepened by labor’s success.
VW’s problems in the United States may have only begun as it faces recalls and sales erosion. Viewed from that point, the UAW victory is minor.
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