Bullying and Bailouts — UAW’s Strategy for Continued Existence

The UAW and its President Bob King recently targeted Nissan to be their first union-affiliated foreign automobile factory, despite the fact that Canton, Mississippi, plant employees brushed off the UAW in 2005 and again in 2010. Yet once more, Bob King is attempting to organize these very same workers.

Why does King think he can succeed this time? Because he is trying to organize the boardroom, not the employees. Knowing if he gives employees a confidential choice they will reject him, King is trying to pressure Nissan to take away the secret ballot from their workers — by implementing card check — so he can bully them into joining his union.

What does UAW bullying look like? In 2011, Mr. King threatened that he would label automakers that resisted his card check scheme as human rights violators. Thus, plants who attempt to protect the privacy of their workers through secret ballots face unwarranted attacks on their reputations for disregarding UAW’s Principles for Fair Union Elections.

One central objective of the Principles is to impose the card check method on dissenting automakers. Card check takes away voter privacy and opens the door to union coercion as employee anonymity disappears; this process makes an employee’s opinion visible to both the union and the employer.

These principles reveal UAW’s tendency to use practically any excuse to eliminate the secret ballot; most notably, if they deem a company to be involved in “anti-union activities.”  How does one define anti-union activities? Would democratically voting twice against union organization be considered anti-union activity?

Nissan workers have continuously rejected the UAW’s attempts to unionize, but the organization continues to attack the Mississippi plant. The plant workers in Mississippi are well paid; they make nearly $10 more per hour than the prevailing wage in the state.

Nissan’s wages, however, are certainly preferable to bankruptcy that results from inflated union salaries and fringe benefits. GM and Chrysler bankruptcies ultimately cost taxpayers nearly $23 billion. The automakers were forced to declare bankruptcy in 2009 after the UAW increased labor costs around 50 percent to 80 percent above comparable foreign manufacturers, including Nissan.

This led to a bailout for the automotive industry, which ended up as a bailout for the UAW. The workers could not produce the amount their wages warranted. To compensate for a lack of competitiveness in the auto market, GM and Chrysler needed a bailout to offset inflated compensation.

In spite of bankrupt automakers, UAW refused to reduce their wages to current market rates. If the UAW had made wage concessions to the market rate, costs at GM could have fallen by nearly $800 million a year. James Sherk of The Heritage Foundation recently released a study in which he wrote “[t]hese concessions would have saved taxpayers—in present value terms—approximately $4.1 billion.” Yet, UAW employees were not forced to take this pay cut, and blameless taxpayers were forced to shoulder the difference.

Nissan never lacked a competitive edge or faced bankruptcy, and Nissan workers consequently rebuked attempts to unionize. Nissan spokesperson David Reuter stated, “Nissan’s wages and benefits are competitive, and Nissan has never laid off a single employee in the nearly 30 years it’s had manufacturing operations in the U.S.” Conversely, GM laid off more than 3,000 workers during the auto bailout.

If the UAW was able to successfully unionize the Mississippi plant, it could ultimately hurt Nissan’s competitive edge by reducing the company’s profits and stock value. This would hurt the very workers the UAW is trying to organize, leading to layoffs similar to those that GM experienced.

Currently, the workers at Nissan have much higher job security than unionized automakers and are already consistently heard by management. Nissan has a structure of management that decentralizes authority and allows more freedom of speech. Nissan workers also lack a monetary incentive to unionize; the UAW no longer has significant benefits to offer new members. Following the implementation of the UAW’s two tier wage structure, wages between Nissan workers and Detroit’s big 3 have narrowed significantly. It appears the main goal of the UAW is not to improve the lives of auto workers, but to pad their dwindling cash reserves.

The union boasted a peak of 1.5 million members in 1979, but subsequently witnessed drops in its membership; this year, it has just 380,719. The lack of income from union dues pressured the UAW to sell almost $264 million in stocks, bonds and property to make ends meet in the past five years.

The unions are desperate to regain their wealth and membership status. Now that the government bailout has run its course, Bob King has no choice but to turn to foreign automakers to restock the UAW’s coffer.