German Union Needs a UAW Victory to Justify Its Own Existence

Posted by Matt Patterson on Thursday, February 13th, 2014 at 11:17 am - Permalink

In an excellent article for RealClearMarkets, economist Diana Furchtgott-Roth speculates as to the real reason Volkswagen seems to be bending over backward to help the UAW into its Chattanooga facility, despite the fact that unionization would increase labor costs and hurt productivity:  IG Metall, the industrial union that controls the company's Works Council back in Germany.  

A win for the UAW, she notes, would also be a win for Metall, even if it means a loss for the plant itself:

"[IG Metall] would rather see the Tennessee plant flounder and the new SUV built at the unionized VW plant in Mexico. To Germans, a successful non-union VW plant shows that cars can be made without unions. And that is not a message IG Metall wants to hear."

Read the whole thing here.