John Ransom

In a close vote, yet one that was widely expected to be favorable to the union, workers at the Tennessee Volkswagen plant rejected an offer by the United Auto Workers to unionize the Volkswagen operations in the state by a 712-626 vote against union.

“Last week's vote at the plant - which was 53 percent to 47 percent against the UAW,” writes Reuters, “dealt a body blow to the union, which has been unable to expand into auto plants in the U.S. South, even as its ranks have declined elsewhere.”

The election is seen as a major rebuff in the UAW’s attempt to expand representation into foreign autoworkers in the United States, which are headquartered in mostly southern states with favorable right-to-work laws.

The vote, while only a first test of union appeal in the south, increases the uncertainty regarding the long-term survival of the United Auto Workers union. It's the worst union defeat in Tennessee since Grant got whipped on the first day at the Battle of Shiloh. Of course, Grant ultimately won that battle the next day.

The UAW has seen its numbers of workers shrink over the last two decades as domestic manufacturers GM, Ford and Chrysler wrestled with high labor and benefit costs compared to foreign manufacturers operating in the U.S.

In fact, GM’s late financial problems were, in part, caused by pension and health plan liabilities to UAW workers, necessitating a federal government bailout. In the $95 billion GM bankruptcy, $50 billion of it was benefit liabilities to UAW workers.

The head of the union, Bob King, has admitted that declining union membership rolls means that if the UAW doesn't "organize these transnationals [foreign auto manufacturers], I don't think there's a long-term future for the UAW — I really don't."

That’s correct.

John Ransom

John Ransom is the Finance Editor for Townhall Finance, host of Ransom Notes Radio and you can catch more of the best money advice and monetary commentary by him daily 10am PT, 1pm ET at or on Comcast Cable