Last week in Chattanooga the workers at the Volkswagen plant voted on whether or not to join the United Auto Workers (UAW). If passed it would also create a “works council” which would be comprised of blue and white collar workers. The council would compromise on larger issues in order to keep all workers happy by avoiding layoffs and strikes. This was a very significant vote because it could possibly determine the future of auto unions in southern states where “Right to Work” laws are very strong. As was expected Republican lawmakers were on the offensive campaigning against the UAW proxy vote seeing as the union supports the Democrats in other states.

After the smoke cleared the vote went in favor of the Republicans by a narrow 86 votes 712-626. They key clause that hurt the UAW stated that the plant had the right to maintain cost and competitive advantages relative to other competitors in the United States. Essentially this gives the works council ability to negotiate rights behind the back of the workers, or so it is perceived.

The consequences of this vote are unclear however, as VW said they would possibly opt to not build any new plants in the United States.

Should VW pull the trigger and not open any new plants in the United States? Or is their stance too extreme?