The European auto parts giant AutoParts is considering buying a majority stake in the United Auto Workers union and is exploring a deal that could see the company sell some or all of its auto parts business to a UAW union.
AutoParts Chairman and CEO Michael Kogan said on Wednesday that the UAW has made the union’s proposal to sell parts to the company “absolutely compelling,” but that it remains to be seen whether the union would accept.
“It’s certainly not something we would have ruled out,” Kogan told reporters at the company’s headquarters in Louisville, Kentucky.
“We think that would be a good way to make the auto parts companies that we work with better informed.”
AutoParts is a joint venture between German auto parts maker Volkswagen AG and UAW, the nation’s largest auto parts union.
It is the second-largest auto parts supplier to Volkswagen, and the largest UAW member.
The union wants to increase the size of its membership by at least 200,000.
Volkswagen and AutoParts have been working on a joint effort to help the U.A.W. win more concessions from Volkswagen, but there have been concerns that the union may have to cut jobs to meet that goal.
The company has not announced a price for the deal yet.
Kogan said the UWA’s proposal is also consistent with its “zero tolerance” policy toward union-busting.
The UAW is trying to push the company to cut manufacturing jobs to improve its competitiveness and boost sales, he said.
The union’s demand for more concessions was also a key component in Volkswagen’s efforts to keep the company from joining the North American Free Trade Agreement, Kogan added.
The deal would make AutoParts the first major U.K. company to enter into a deal to sell auto parts to a union.
The agreement would give the UW an even stronger voice in the union and would allow the union to hold the company accountable for its actions, Kogans comments said.
The auto parts sector is in the midst of a resurgence.
U.C. Berkeley’s Center for Automotive Research says auto parts sales jumped by more than 20 percent last year, driven by advances in sensors, automation, robotics, robotics and the cloud.