VW won't recognize UAW before audit

Washington — Volkswagen AG said Wednesday it will not immediately recognize the United Auto Workers union until an external audit establishes its membership level — and it opened the door to working with other groups representing employees.

The German automaker said it has created a "Community Organization Engagement policy that sets guidelines for interactions with labor organizations whose membership includes a significant percentage of Volkswagen Chattanooga employees."

The policy — obtained by The Detroit News — requires a union to get at least 45 percent of eligible employees in a specific group to join. But the union could not seek to be the exclusive bargaining agent for all employees. The VW policy doesn't expressly state it would agree to bargain over wages, benefits and working conditions with any union.

The policy appeared to be less than the UAW had sought — and the union suggested it may not be in line with agreements reached last year.

"We appreciate Volkswagen's effort to articulate a policy for how it will engage with UAW Local 42 and its members in Chattanooga. We have questions about this policy, which we'll work through in discussions with management. But this is a step forward in building stronger relations between management and employees,"said Gary Casteel, secretary-treasurer of the UAW. "Today, we will begin working with Volkswagen so the company can verify our substantial membership level, which now is in excess of a majority of workers at the plant. When that verification has been completed, we will take advantage of the company's offer to establish regular meetings."

The UAW statement said it will remind VW "of the mutually agreed-upon commitments that were made by Volkswagen and the UAW last spring in Germany. Among those commitments: Volkswagen will recognize the UAW as the representative of our members. We believe Volkswagen made this commitment in good faith and we believe the company will honor this commitment."

The policy recognizes unions if they receive at least 15 percent or 30 percent of support with meetings with VW officials and the ability to use plant space for meetings. As they gain more members, they can post materials on a bulletin board and have outside union officials come to the plant once a year.

Still the policy paves the way for the UAW to be recognized by VW — and could be a major step forward in the union's effort to organize foreign auto plants.

Harley Shaiken, a labor professor at the University of California Berkeley, said if the policy had been in effect last year, the new policy "likely would have recognized the UAW" in September 2013.

On Monday, the UAW told workers Monday at Volkswagen's Chattanooga, Tenn., assembly plant that it expects the German automaker this week to announce a new policy that will lead to its local being recognized. The UAW said in October that more than 750 workers at the plant have joined.

VW says an external auditor will verify the percentage of a particular group's employee membership to determine what level of engagement has been reached. VW didn't immediately release its policy.

VW says groups must exist for the primary purpose of representing employees and their interests to employers consistent with the National Labor Relations Act. VW says the policy "establishes a method to assure fair and equal treatment of all groups through a process that is transparent, respectful and consistent. Its purpose is to allow eligible organizations the opportunity to engage in constructive dialogue with Volkswagen and its employees."

In July, the UAW opted to form a local to represent workers in Chattanooga, rather than hold another election. The union suffered a big setback in February, when workers voted 712-626 to reject creating a German-style works council. The vote came after heavy pressure from Republican lawmakers.

"We are writing to update you on our progress toward being recognized as Volkswagen's bargaining partner," wrote Mike Cantrell, who is president of UAW Local 42 seeking to represent VW workers. "It is our understanding that Volkswagen this week will announce a new policy in Chattanooga that will lead to recognition of Local 42. We await details from the company on this policy and will share more thoughts after the announcement."

The Community Organization Engagement policy establishes three levels of engagement depending on the number of employees that have joined a group. VW said under this program engagement would "include the ability to use company space for group meetings, the ability to post information and announcements, and to have regular meetings with Volkswagen management representatives."

The statement didn't say if or when VW would recognize a union as the exclusive bargaining agent.

"We recognize and accept that many of our employees are interested in external representation and we are putting this policy in place so that a constructive dialog is possible and available for everyone," said Sebastian Patta, executive vice president of human resources at Volkswagen Chattanooga.

VW has more than 100 plants worldwide — and only the Chattanooga plant is non-union.

"Volkswagen has a long tradition of positive employee engagement at our plants around the world and we welcome this in our company," Patta said.

VW says it still wants to hear from employees.

"Of course, any employee can approach Volkswagen at any time with an idea or a concern. But we wanted to extend these additional opportunities to groups of employees who want to talk with Volkswagen about issues of common interest," said Ryan Rose, general manager for HR Operations.

In July, VW said it would commit $900 million and creating 2,000 jobs to build mid-size SUVs in Tennessee.

In choosing to expand in Chattanooga, VW rejected Mexico, where a growing number of automakers are dramatically expanding production, to build its mid-sized SUV — a vehicle that industry analysts say it needs to be more competitive in the U.S.

In 2011, the automaker opened the Chattanooga plant, its first in the United States since closing a plant in Pennsylvania in 1986. It now assembles in North America more than 72 percent of the vehicles it sells in the U.S. and has vowed to boost that to at least 75 percent.

Last month, the UAW said it would establish a local chapter in Alabama that the union hopes will convince Mercedes-Benz factory workers to sign up voluntarily. The UAW's new Local 112 in Vance, Alabama, is aimed at organizing the 2,500 workers at the Daimler plant who build SUVs and the company's new C-Class sedan.

The UAW has struggled, unsuccessfully, for decades to organize new foreign auto assembly plants. The UAW has noted that nonunion foreign plants in the U.S. generally have lower wages and benefits than domestic auto plants — and that makes it difficult to win higher compensation for UAW workers.