University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Supervised Undergraduate Student Research Chancellor’s Honors Program Projects and Creative Work 12-2014 Volkswagen Chattanooga and its Battle for Workers' Representation Bianca C. Fankhauser University of Tennessee - Knoxville, [email protected] Follow this and additional works at: https://trace.tennessee.edu/utk_chanhonoproj Part of the Collective Bargaining Commons, International and Comparative Labor Relations Commons, International Business Commons, Law and Politics Commons, and the Unions Commons Recommended Citation Fankhauser, Bianca C., "Volkswagen Chattanooga and its Battle for Workers' Representation" (2014). Chancellor’s Honors Program Projects. https://trace.tennessee.edu/utk_chanhonoproj/1798 This Dissertation/Thesis is brought to you for free and open access by the Supervised Undergraduate Student Research and Creative Work at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Chancellor’s Honors Program Projects by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. Volkswagen Chattanooga and its Battle for Workers’ Representation Bianca Chrétien Fankhauser University Honors 498: Honors Thesis Project Thesis Advisor: Dr. Maria Stehle University of Tennessee, Knoxville December 11, 2014 Fankhauser, Bianca 2 INTRODUCTION Volkswagen, one of the most recognized brands around the world, is known for its engineering innovation, its iconic cars, as well as its Nazi past. In recent news, the car company has also been receiving some media attention at its newest manufacturing location in Chattanooga. The plant only opened in 2011, but has since been the center of a controversy involving the United Automobile Workers, Volkswagen, and Tennessee politicians. The UAW, which has historically worked with automobile workers employed in northern states, attempted to unionize the Chattanooga location in February 2014, but lost with a narrow margin. While some were pleased with the outcome of the vote, others were not, accusing politicians of being too involved in the inner workings of the Chattanooga location. Other critics felt that Volkswagen was biased towards the union, by allowing UAW lobbyists to campaign directly to the employees. In July 2014 the UAW announced that they would form a local, voluntary chapter in hopes of bringing a Workmen’s Council to the plant. To grasp this complicated tension, we must first delve into Volkswagen’s history. HISTORY OF VOLKSWAGEN IN GERMANY The complicated history of Volkswagen actually began as a collaboration between Ferdinand Porsche, a celebrated automobile designer, and Adolf Hitler, the fearsome leader of Nazi Germany. The pair didn’t meet until 1933, but quickly after began to exchange ideas and laid the foundation for a project they felt would revolutionize Germany’s automobile industry. Before this could happen, however, they had to separately discover their mutual enthusiasm for cars. Porsche began his journey into the automobile world by working for Tatra, a Czech car company. Though he had many innovative ideas, such as an early concept for a hybrid/electric car, Porsche was truly passionate about creating an affordable family Fankhauser, Bianca 3 car and sharing his love for the auto-world. However, the company was unable to substantially finance Porsche’s budding projects, and he moved to Germany’s Austro- Daimler (Kiley 37). Unfortunately for Porsche, WWI broke out shortly after, and the car designer found himself creating various army vehicles to supply German troops. Following the war, Austro-Daimler returned to making luxury cars for Germany’s wealthy and Porsche’s plans to create a car for the working-class was pushed aside once more (Kiley 37). By 1933, Porsche was working for the Auto Union, a company that resulted in the merge of three other business firms (Kiley 38). Adolf Hitler’s interest in the Automobile industry grew while he served his prison sentence in 1923. During this time, he read Henry Ford’s Autobiography , My Life and Work and was impressed both by Ford’s efficient industrial advances, as well as his infamous anti-Semitism (Kiley 38). Around this point in time, one out of every 4.5 Americans was a car owner. In contrast, only one of every 49 German citizens owned a car (Kiley 37). Hitler admired Ford’s work of bringing affordable Model Ts to America’s mass public and began to envision a mobile Germany. Hitler believed that by providing German citizens with affordable cars, he could increase the national pride and help solidify the Nazi movement. Furthermore, Hitler felt that increased mobility also increased the cultural standard of Germany and could restore Germany’s economy (König 251). Porsche remembers his first meeting with Hitler in 1933, when he and other members of the Auto Union approached the Führer for government assistance in order to develop new engines and sports cars. It was at this meeting that Porsche and Hitler first discovered their mutual interest in building an affordable, mass-produced automobile (Kiley 38). In 1934, Hitler spoke at the Berlin Auto Show and exclaimed the importance of Fankhauser, Bianca 4 designing a “people’s car” for Germany’s citizens (Kiley 38). That same year, Hitler and Porsche met again, in order to discuss the goals for their new, innovative design. In order to gain Hitler’s favor, the Reichsverband der Automobileindustrie (RDA, or car manufacturer’s association) decided to fund the project (Kiley 39). Knowing that Hitler held Porsche in such high esteem, they signed a contract with Porsche as the head designer in June 1934 (König 254). Hitler envisioned a small, practical car that could easily accommodate a family of four and could obtain up to 40 mpg (Kiley 38). Likewise, Porsche thought that the car had to be approximately 1,400 lbs, have 26 horsepower, and reach speeds up to 62mph (Kiley 38). Simply put, the car had to compliment Germany’s new Autobahn infrastructure. Porsche believed that the production costs of such a vehicle would be approximately $620 US, but Hitler wanted the cost much lower –$320 US (Kiley 39). According to Konig, Hitler publically announced a price of 1000DM (254). Despite his reasonable doubts about the price, and likely to avoid conflict with Hitler, Porsche continued to pursue their joint- project and began designs for a few prototypes. Hitler was pleased in 1934 when he stated, “I am happy that due to the abilities of the superb designer Herr Porsche and his staff we have succeeded in completing preliminary designs for a German people’s car. It must be possible to make the German people a gift of a motor vehicle which will not cost them more than they have heretofore been accustomed to paying for a medium priced motorcycle and whose gas consumption will be low” (Kiley 39). On the surface, it certainly seemed as though Porsche was finally on his way to designing an affordable working-class car. However, Porsche continued to have hesitations about meeting Hitler’s proposed price. In fact, by 1936 Porsche and his team had spent a Fankhauser, Bianca 5 total of 1.75 DM and only created 3 failed prototypes (König 254). It wasn’t until the director from Adam Opel Company, Wilheim von Opel, insulted Porsche by calling his task “impossible”, that Porsche fully reinvested himself into Hitler’s vision (Kiley 40). In 1936, he decided to visit America’s Auto-Capital in Detroit (Kiley 39). Porsche was impressed with the structure of Ford’s manufacturing plant, as well as the social interactions of the site-workers. Without a doubt, the assembly line was vastly different than the auto factories in Europe. Porsche knew that he would have to revolutionize how German auto plants manufactured if the “people’s car” were to reach Hitler’s goal price. By 1937 Porsche and his team still had not reached an operable prototype that was only $320 US (Kiley 41). Both Hitler and Porsche were becoming increasingly frustrated with the slow progress. This same year, Hitler attended the Berlin Auto show and was flabbergasted that the Adam Opel company was promoting a new model “for the little man” at approximately $582 US. Wilheim von Opel, the same director that had previously insulted Porsche, proudly presented his “ Volkswagen ” to the Führer , but Hitler was enraged (Kiley 42). Kiley suggests that the reason for Hitler’s rage is that he had not been directly consulted in von Opel’s project, nor did von Opel design a suitable car for the masses (42). Furthermore, it is important to note that the Adam Opel Company was under management from General Motors (König 250). Though Hitler admired the U.S. auto industry, surely the Fuhrer was not pleased that Americans were besting him. In May 1937, the RDA was no longer capable of running the Volkswagen project and Hitler appointed the DAF, or German labor front, in charge (König 255). Shortly after, the Nazi party established the Volkswagen Development Company in order to thoroughly invest in Hitler’s Volksauto vision. They decided to locate the company in present-day Fankhauser, Bianca 6 Wolfsburg, though at the time the city was known as KdF-Stadt (Nelson 81). In 1938 Hitler laid the cornerstone on the site and officially named the Volkswagen car the KdF-Wagen (Nelson 77). To gain interest in the car, the DAF specifically promoted the car through its Kraft durch Freude (Strength through Joy) department (König 258). This department was specially in charge of organizing free-time activities and vacations for the German public (König 258). The Nazis wanted German citizens to see the people’s car as a mode of leisure and pleasure. After the Volkswagen Development Company was established, Porsche finally received direct investments from the government, rather than through the RDA.