Carmakers and unions: Let's go German IN 1979 the United Auto Workers (UAW) had more than 1.5m members, and nine of the country's ten bestselling cars were American brands. The Toyota Corolla came eighth: the first time a foreign-branded car had cracked the top ten. Today the UAW's membership is around 400,000, and not all of those are car workers: over the years the union has sought recruits on farms, in casinos and at universities. And of the top ten bestselling cars in America last year, seven were foreign-badged. Americans are not only buying foreign-badged cars, they are also making them: seven of America's 15 most productive assembly plants last year were foreign-owned. Although the UAW has had some success at unionising foreign-owned partsmakers - such as Faurecia and ZF, a French and a German company which supply the Mercedes factory in Alabama - it has so far failed to organise workers at the carmakers themselves. Its attempts in recent years to get into Nissan's plants in Tennessee and Mississippi have failed. Now it has set its sights on German carmakers: Mercedes and, especially, Volkswagen. At VW's plant in Chattanooga, Tennessee, the UAW, with support from IG Metall, which represents workers in VW's German plants, has been pushing for the creation of a works council. In German (and most European) law, such factory-level bodies are distinct from labour unions: they cannot call for strikes, and their membership is limited to employees at the plant in question. Their relationships with management tend to be less adversarial than American unions. But the UAW (which declined to comment for this article) seems to see them as a foot in the door towards eventual union recognition. The status of works councils under American labour law - in particular, whether a company can have a works council without a union - is unclear. Managers are legally prohibited from "assisting" labour unions, and the National Labour Relations Board has tended to interpret that ban strictly. If VW workers do choose a works council, one way of satisfying the law might be to bring in an outside union to represent employees, thereby giving the UAW a way in. It is no coincidence that most of the foreign-owned plants have been built in "right to work" states in the South. Such states ban "closed shops" in which employees are forced to join a union at their workplace. This makes it harder for unions to gain influence, even if they have recruited some of the workforce at a plant. But the UAW's boss, Bob King, has acknowledged that it must keep on trying to organise the foreign-owned assembly plants, otherwise it may not have a long-term future. When the foreign carmakers arrived, the UAW was strong enough to force them to pay the wages it had negotiated with the American car giants in Detroit. But as the number of jobs in the foreign-owned plants grew, and Detroit's workforce shrivelled, the union lost that price-setting power. Since the cost of living in the South is relatively cheap, the foreign carmakers could pay less than the American ones but still find plenty of willing recruits. The dire state of the American carmakers, culminating in their government bail-out in 2008 and the 2009 bankruptcies of GM and Chrysler, has forced the union to make concessions, including accepting lower-paid "Tier 2" workers at Detroit plants. So now, reckons Kristin Dziczek of the Centre for Automotive Research in Michigan, average pay at the American and foreign-owned assembly plants has more or less equalised, at around $27 an hour. That said, the American firms still have huge pension liabilities, a legacy of the UAW's former negotiating power: GM has around ten retired workers for every active one, driving total labour costs to around $78 an hour per worker, compared with $55 at foreign-owned carmakers. For now, VW and the union appear to be circling each other warily. Scott Wilson, a VW spokesman, says the company is "working on an innovative model for the representation of employees" interests... based on positive experience in Germany." Whether this means a works council, or something else, is unclear. Both Tennessee and Alabama have Republican governors who have made clear their opposition to unionisation at the car plants. But the UAW's attempt to recruit VW and Mercedes workers may be its best shots at getting into foreign-owned plants. VW's managers are being cagey but not overtly hostile. And the union has been careful to speak in terms of collaboration and openness, rather than strikes and bringing management to its knees. It knows it could achieve neither.