BEERG: UAW's Works Council Proposal for VW USA Faces a "Rough Ride"

May 29, 2015

The BEERG Global Labor Newsletter critiques the United Auto Workers' recent proposal for a works council at the Volkswagen Group of America plant in Chattanooga, noting that "in the world of labor relations, what can look neat on paper can turn out to be anything but in reality."  The union recently proposed a "Vision Statement for a Collectively Bargained Works Council," with hopes of establishing a German-style council if and when the company grants a card check recognition of the union.  In its critique, BEERG notes that the proposal will be "broadly familiar to anyone" who understands works councils in Germany, but the "one major difference" is that the "structure and powers of works councils in Germany are defined by law and not by collective agreement."  BEERG observes this would have a substantial impact on the amount of authority management would delegate to the works council:

[I]t is relatively easy to agree on the structure of the EWC, the scheduling of meetings, and the issues that will be discussed.  Matters become difficult when EWCs begin to push for delay or veto powers. . . The UAW "Vision" paper has nothing to say about what is to happen if the union cannot reach agreement with VW U.S. management on the constitution of a works council because management is unwilling to hand power over to the works council.  Will it call its members out on strike over the matter?  What other leverage does it have?  Does it believe that top management in Germany will order U.S. management to fold in the negotiations?  Nor does the paper have anything to say about what is to happen if there is a dispute between the works council and management, assuming agreement can be found on its constitution.  In the absence of a legal framework for works councils in the U.S. would management agree to a system of binding arbitration?  If so, this would be handing significant leverage to the works council as it would be a "no brainer" to refer issues to arbitration where there is always the chance of a "win."