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VW, UAW look to avoid Pennsylvania missteps in Tennessee plant

By Ben Klayman

DETROIT (Reuters) - Both Volkswagen AG management and the United Auto Workers union want to see history play out differently in Tennessee from the last time the German automaker had a U.S. assembly plant.

While the landscape is very different from 25 years ago, the legacy of the older plant's failure is part of the troubled history the UAW will have to overcome as it tries to represent VW workers again -- this time in Tennessee, where the automaker employs 2,500 people building Passat sedans.

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

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

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

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

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

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

UAW leaders say things will be different this time because they want to establish what they call a new kind of labor model in Tennessee, where the union would represent hourly workers in partnership with a German-style workers council. The UAW, which has said it has the support of the majority of the plant's hourly workers, has pushed VW officials to recognize the union without 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 other foreign-owned U.S. auto plants and bolster the union's membership, which has shrunk by about three-quarters since its peak in 1979.

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

A WORLD AWAY

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

The state of Pennsylvania has owned the site since VW left and leases more than a quarter of the property to a range of smaller firms, including a maker of sodium ion batteries and energy 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 15 Walmart supercenters, are a few forest green interior walls.

SHARED BLAME

The reasons for shutting the plant included flagging demand for the outdated small cars it built, a weak U.S. dollar that hurt VW when shipping parts to the plant from overseas, and an adversarial relationship between the plant's American managers and VW's headquarters in Wolfsburg, Germany, former workers and executives said.

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

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

"The word came over, ‘We want you to look favorably on the UAW organizing the plant,'" one of the former VW executives, who asked not to be identified, said of the Pennsylvania plant. "The fact 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 UAW has emerged from the wreckage of the auto industry in Detroit and the union can be a more flexible partner with management.

That runs counter to the early experience of VW in Pennsylvania. Several unauthorized walk-outs by workers in the plant'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 the South.

‘NO MONEY, NO BUNNY'

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

But VW also courted trouble by initially hiring managers from U.S. automakers General Motors and Chrysler, where conflict with the union was a normal part of the workday, former employees said.

Ken Prevenslik, 58, the last president of the UAW local at the Westmoreland plant, remembers pleading with plant supervisors for respirators he and other welders could use to keep from inhaling smoke on the job. Managers dismissed the safety 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 in time, they started realizing we're all in this together."

MANAGEMENT MISSTEPS

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

German executives had become frustrated with American sales managers, who they felt had botched the job of marketing the small cars built in Pennsylvania. In turn, said the former VW executives, who requested anonymity, the Americans blamed the Germans for failing to offer updated designs to the boxy Golf or features American buyers demanded, like cupholders.

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

In fact, the factory spokesman wrote to local newspapers shortly before the plant closed disputing that poor relations with the UAW had any role in VW's decision and instead pointed to weak sales.

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

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

"They basically said, ‘You could work for free and we would not continue to build cars in this country,'" he recalled.

Today, both VW and UAW officials said what happened in Pennsylvania has no effect on Tennessee. "It's such ancient history that it has no relevancy to today's situation," said Gary Casteel, director for the UAW region that includes Tennessee.

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

(Editing by Dan Grebler)

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