Thursday, February 27th, 2014
Workers at Volkswagen’s Tennessee auto plant voted down representation by the UAW last week, a result the Detroit Free Press labeled a “devastating defeat” for the union. Conditions were as close to ideal as possible for the UAW to organize a Southern auto plant. For one thing, VW, prodded by the labor representatives on its supervisory board (German companies operate under a co-determination regime in which unions hold half the seats on the company’s board), tacitly endorsed the UAW’s organizing drive. The company even allowed the UAW into the plant to make pro-union presentations, something not afforded to employee critics of the union. Beyond pressure from Germany’s IG Metall union, VW wanted to set up works councils to help guide the plant, something forbidden by America’s archaic labor laws that only permit outside unions to represent workers.
There was some kerfuffle over local government officials in Tennessee urging the rejection of the UAW, and hinting that signing on to the union would lead VW to stop future investments. The UAW is asking the National Labor Relations Board to void the election because of that. The claim appears specious, but with the heavily politicized NLRB, anything is possible, particularly if VW refuses to mount a defense in order to aid the UAW over the wishes of its own workers.
But rather than outside pressure, it seems more likely that Volkswagen workers were already satisfied with their jobs. Beyond a works council, it’s hard to see what they would be getting. Pay is comparable to the Detroit Three. Working conditions appear to be excellent. No one is complaining. It’s a very different situation from the sit down strike era in which by organizing the UAW was able to significantly upgrade the condition of labor, in the auto industry, but ultimately also in the country at large. The specter of the GM and Chrysler bankruptcies, along with the disastrous experience at an early VW plant in the US some years back which ultimately closed after UAW strikes, seems to have led workers to conclude that the ineffable benefits of unionization weren’t worth the risks.
This result has emboldened organized labor’s critics. For example, South Carolina Governor Nikki Haley said unionized jobs were not welcome in her state. Apparently even the Detroit Three’s management is worried about the union’s future.
What then should the UAW and the American labor movement do, at least with regards to private industry?
First, let’s get one thing out of the way. Who caused GM and Chrysler to go bankrupt? The blame clearly lies with management. Whatever the flaws of the union, they weren’t the ones charged with running the company. Management was. Other heavily unionized companies managed to make the transformation required to succeed. General Electric did it. Caterpillar, a UAW shop, did it. CAT fought a lengthy and bruising battle that left wounds which will never heal in Peoria, yet today they are an American industrial champion in the global economy. The automakers’ management by constrast never had the stomach for tough choices or tough fights.
Instead, their executives lived like kings. The stories I’ve heard from friends who worked at these companies blows my mind. My one friend, who was a manager at GM, had to collect a company Escalade, pick up an executive’s wife at the airport, and chauffeur her around shopping on Michigan Ave. in Chicago during the auto show. He also had to make sure the exec’s hotel room was properly prepped with the right drinks and chocolates. Another friend told of buildings at Chrysler in which there were doors you could only use you were above a certain classification level in rank. The order of the names on memos had to be in the correct pecking order. On and on. Even if these were exaggerated, the various stories from different people in different companies – all of which happened during a time in which these companies were in steep decline – shows an extraordinarily arrogant management culture.
Nevertheless, it’s still difficult to see the relevancy of traditional union models to the modern American workplace. The VW vote shows that they have little to offer, and perhaps might even be a negative. In fact, the enthusiasm of IG Metall for the UAW might not be all that it seems. They represent German workers. And it’s in the best interest of those workers to make American plants inefficient so as to reduce the incentives to offshore from Germany to America. Keep in mind, for VW, America, like Eastern Europe, is a low cost location.
If you look at it, unions may be on the last institutions in America that haven’t rethought their business model for the 21st century. They still want to play hardball to organize, then insist on things like crazy work rule systems and puristic seniority pay structures, political advocacy, etc. What has that gotten them? The private sector is down to like 6% unionized, much of it in industries that are increasingly subject to foreign competition and thus whose management cannot give much away without sabotaging their business.
But could there be a role for unions if they rethought their entire approach? I Think there could be. We keep hearing about a workforce gap in skilled technical workers. We also have a collegiate model of education that’s churning out too many semi-employable graduates with mountains of debt they can’t pay back. And companies increasingly what “just in time” labor the way they want just in time delivery of materials. Why can’t the unions be part of the solution to this?
If unions repositioned themselves as the go to place for skilled labor – or even just workers who can pass a drug test and are able to operate at the level of expectations for the modern factory in a low skilled context – this would be a hugely valuable service.
The one part of the union movement that still seems to be doing fairly well is the trade unions. Many of them have long operated on this model. You get into the union where the union trains you and are staffed on a project basis (e.g., constructing a bridge). The union delivers your benefits and pensions, based on payments from the employers. While this system does have its problems – witness the recent racketeering indictment of Philadelphia ironworkers for violent intimidation (they called themselves the THUGS, The Helpful Union Guys, I’m not making this up) – but in general when I ride an elevator up to the 50th floor of a skyscraper, I’m glad it was built by union labor.
Trade unions and their hiring halls are basically contract consulting providers of the type that routinely provide technical employees to major corporations. Why can’t other unions, reconstituted as a type of worker’s collective, do the same thing? And unlike contracting firms, they wouldn’t have to take nearly as big a middleman’s cut.
This is only one speculation of course. But the need for unions to reinvent their business model into something that’s relevant to the 21st century economy is urgent. With continued declines in membership and the rise of right to work laws in places like even Michigan and Indiana, they’d better figure it out fast before it’s too late.