NEW YORK — There is no German-style "works council" for employees at Volkswagen USA. Then, last week, 1,500 workers of the Volkswagen Chattanooga Assembly Plant, in Tennessee, voted by secret ballot against being represented by the United Auto Workers (UAW). Without membership of that union, setting up a works council is not possible under American law.

For Volkswagen as a company the vote means relatively little — but it means a great deal in terms of labor relations in American industry. And it’s also a setback for the chair of the VW works council back at the German company's headquarters in Wolfsburg, who had been heavily invested in the "Works Council in Chattanooga" project, and now finds himself without a partner in the U.S.

It’s mainly a resounding defeat for the UAW, one of the last relevant traditional industry unions in the U.S. President Bob King knew what the issue was with VW: If the union wants to stay relevant at a national level in the future it must be capable of organizing not only General Motors, Ford and Chrysler but also the until now union-less production sites of foreign manufacturers like VW, BMW, Daimler and Toyota that are mostly located in the southern states.

Don't rock the boat

But if it doesn’t work at VW, where will it work? The model of the works council, which exists in other forms in Europe, is especially widespread in Germany, where local boards comprised of both employees and management implement national labor agreements in a way that makes sense at their particular workplace.

In the past few weeks Republican politicians and conservative groups spent a lot of money on an anti-UAW offensive, but the union’s chances remained relatively good before the vote. Unlike the situation at other plants, VW management was not fighting the union and officially took a neutral stance towards the vote, and a rather friendly unofficial line.

The workers nevertheless decided they didn’t want the union; they feared the build-up of an atmosphere of hostility and the loss of jobs if the union were to prevail; whereas they presently feel decently treated — and paid — at VW.

In Chattanooga — Photo: Village VW of Chattanooga

The Chattanooga case shows with brutal clarity that the American model of the scrappy industry union has seen its day — and this despite the growing anger of Americans at the country’s extreme economic inequality. Still relevant are unions for firefighters, police officers, teachers and other public sector employees whose jobs are relatively secure. In future-oriented areas like Silicon Valley unions play no role at all, and they’ve had to step back from traditional industrial sectors.

But that doesn’t mean that the German works council model has become uninteresting for the Americans. On the contrary. During the big showdown in Chattanooga, both conservatives and progressives showed broad sympathy for the idea of cooperative labor relations in companies. With regard to the works council, the UAW explicitly presented itself as a reformed organization that had forsworn the bellicose stances of the past. But the claim was put forward too late to be credible.

If IG Metall and the Wolfsburg works councils are serious about their model, then in the future they should spend less energy lobbying for German support and focus more on developing models with American experts to find a way for a works council to be possible under existing legal stipulations.

The regulation that says that a works council is only possible when the company belongs to a union protects workers was meant to hinder the creation of bodies that might actually favor employers. The works council goal can surely be realized without sacrificing cooperative labor relations. It could be that the Chattanooga vote opens the road to genuine reform in America.