VW, UAW look to avoid Pennsylvania missteps in Tennessee plant

Reuters

By Ben Klayman

DETROIT, Oct 21 (Reuters) - Both Volkswagen AG management and the United Auto Workers union want to see historyplay out differently in Tennessee from the last time the Germanautomaker had a U.S. assembly plant.

While the landscape is very different from 25 years ago, thelegacy of the older plant's failure is part of the troubledhistory the UAW will have to overcome as it tries to representVW workers again -- this time in Tennessee, where the automakeremploys 2,500 people building Passat sedans.

After the 1988 closure of VW's plant in southwesternPennsylvania, Ron Dinsmore kept a grisly toll of the pain: thenumber of suicides of former workers. He stopped counting at 19.

"I used to go to every funeral home," said Dinsmore, 71. "Iquit doing it. It got morbid."

Dinsmore was hired at the VW plant in East Huntingdon whenit opened in 1978 and stayed on even after the last car - atwo-door Golf -- rolled off the line a decade later. By thattime, he was also a UAW official.

When Volkswagen decided to open its first U.S. assemblyplant in the 1970s, it assumed it would have to deal with theUAW, then at the height of its power as an industrial union anda force in American politics. Dealing with the UAW was seen asthe cost of doing business.

How the German automaker will deal with the U.S. union todayat its two-year-old plant in Chattanooga is not so clear.

The VW plant in Pennsylvania was troubled from the startwith wildcat strikes and costly production shutdowns.

UAW leaders say things will be different this time becausethey want to establish what they call a new kind of labor modelin Tennessee, where the union would represent hourly workers inpartnership with a German-style workers council. The UAW, whichhas said it has the support of the majority of the plant'shourly workers, has pushed VW officials to recognize the unionwithout a formal election, a move the company has resisted.

Success in the South, where anti-union feelings run strong,could open the door to similar UAW organizing efforts at otherforeign-owned U.S. auto plants and bolster the union'smembership, which has shrunk by about three-quarters since itspeak in 1979.

VW has moved slowly, however, and a source with knowledge ofthe management board's thinking told Reuters this month that anyfinal decision will need the approval of the workers through aformal vote. The board is divided on whether and how workers atthe plant should be represented by a union.

A WORLD AWAY

VW's Chattanooga factory is a world away from the plant inrural Westmoreland County in Pennsylvania that employed 5,700people at its peak.

The state of Pennsylvania has owned the site since VW leftand leases more than a quarter of the property to a range ofsmaller firms, including a maker of sodium ion batteries andenergy storage systems.

The only traces of VW at the 2.8 million-square-foot plant,which along with the surrounding land is big enough to hold 15Walmart supercenters, are a few forest green interior walls.

SHARED BLAME

The reasons for shutting the plant included flagging demandfor the outdated small cars it built, a weak U.S. dollar thathurt VW when shipping parts to the plant from overseas, and anadversarial relationship between the plant's American managersand VW's headquarters in Wolfsburg, Germany, former workers andexecutives said.

There has been similar friction between VW's U.S. executivesand leaders back in Germany over whether to allow the UAW torepresent the Tennessee workers. To help its cause, the UAW hassought the support of VW's global works council, as well as thepowerful German union IG Metall.

It would not be the first time the UAW has received supportfrom IG Metall, which intervened to help the U.S. union inPennsylvania in the late 1970s.

"The word came over, 'We want you to look favorably on theUAW organizing the plant,'" one of the former VW executives, whoasked not to be identified, said of the Pennsylvania plant. "Thefact was that IG Metall put a big threat on VW in Germany -'Help them organize, or else.'"

UAW President Bob King, 67, is eager to show that a new UAWhas emerged from the wreckage of the auto industry in Detroitand the union can be a more flexible partner with management.

That runs counter to the early experience of VW inPennsylvania. Several unauthorized walk-outs by workers in theplant's first two years left a bitter taste with some managers.One former VW executive said if he could do it all over again,he would have urged the company to open a non-union plant in theSouth.

'NO MONEY, NO BUNNY'

In one of the early walk-outs, workers chanted "No Money, NoBunny," referring to their refusal to build the VW Rabbit unlessthey were paid wages and benefits equal to those of UAW workersat the Detroit automakers. Other walk-outs took aim at whatworkers saw as unfair dismissals or treatment.

But VW also courted trouble by initially hiring managersfrom U.S. automakers General Motors and Chrysler, whereconflict with the union was a normal part of the workday, formeremployees said.

Ken Prevenslik, 58, the last president of the UAW local atthe Westmoreland plant, remembers pleading with plantsupervisors for respirators he and other welders could use tokeep from inhaling smoke on the job. Managers dismissed thesafety concern, he said.

When Prevenslik asked to take a Saturday off to get married,he was denied permission. "I took it off, and they wrote me up,"he said of his wedding day.

But he added that things "changed somewhat. At some point intime, they started realizing we're all in this together."

MANAGEMENT MISSTEPS

In the end, tension with the UAW was not the main reason forthe plant's closing, former workers and VW executives said.

German executives had become frustrated with American salesmanagers, who they felt had botched the job of marketing thesmall cars built in Pennsylvania. In turn, said the former VWexecutives, who requested anonymity, the Americans blamed theGermans for failing to offer updated designs to the boxy Golf orfeatures American buyers demanded, like cupholders.

"The American public wanted change in the body style," saidformer plant worker Jerry Lucia, 68. "We were there when theplant closed in 1988 and they hadn't changed the body style."

In fact, the factory spokesman wrote to local newspapersshortly before the plant closed disputing that poor relationswith the UAW had any role in VW's decision and instead pointedto weak sales.

In 1987, the UAW offered sweeping concessions, including paycuts, to try to save the plant. When that failed, Dinsmorestayed on with an agency to help workers find new jobs.

Prevenslik continued to lead the union as members helpedbreak down the equipment to send it to automaker VW's partner inChina. The irony of paying UAW members to break down productionequipment to send it to China was not lost on Prevenslik, amongthe last workers at the plant.

"They basically said, 'You could work for free and we wouldnot continue to build cars in this country,'" he recalled.

Today, both VW and UAW officials said what happened inPennsylvania has no effect on Tennessee. "It's such ancienthistory that it has no relevancy to today's situation," saidGary Casteel, director for the UAW region that includesTennessee.

"The lesson to be learned from Westmoreland is that you haveto have the proper product to succeed in the American market."

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