Labor politics is desperate, thanks to capital mobility
The United Automobile Workers (UAW) recently failed to unionize the Volkswagen assembly plant in Chattanooga, Tennessee. The campaign—and failure—revealed the desperation and changing dynamics of modern labor unions.
The UAW is the richest union in North America, with assets of reportedly more than $1 billion at the end of 2012. It is arguably also the most politically influential, because it donates large amounts of money to Democrats. Like most unions, however, its membership and dues are in decline while its costs, such as pension benefits, are climbing. According to the Bureau of Labor Statistics’ Union Members Summary (Jan. 24, 2014), there were 14.5 million members in 2013, compared with 17.7 million in 1983, and 11.3 percent of workers belonged to a union in 2013, compared to 20.1 percent in 1983.
For the UAW and, perhaps, labor unions in general, the Chattanooga vote was a pivotal event: Foreign manufacturers employ a huge—and nonunionized—workforce.
The stumbling block: Foreign auto manufacturers such as Nissan, Volkswagen, Toyota, and Mercedes-Benz have set up plants in
Southern “right-to-work” states. These states defend a worker’s right not to join a labor union; other states allow closed shops in specific industries, meaning that they exclude non-union workers. A February 15 Forbes article explained, “In more than 30 years, none of the free-standing assembly plants owned by foreign manufacturers in the United States have ever been organized. (This doesn’t include factories that originally began as joint ventures.)”
According to CBC News, the UAW isn’t alone in its concern: “Detroit’s three automakers—Ford, Chrysler and General Motors—are increasingly anxious about the 78-year old union’s future.”
Why would the UAW’s future worry Detroit’s big three? Unions and corporate executives, though they’re usually cast as enemies, share a vested interest in keeping the union strong.
“For them, it’s a ‘devil you know’ situation. They worry that the 382,000-member UAW could be absorbed by a more hostile union. Such a merger could disrupt a decade of labour-management peace that has helped America’s auto industry survive the financial crisis and emerge much stronger, according to a person with knowledge of executive discussions,” CBC News reported.
A standard method by which to unionize an American workplace is to have at least 30 percent of employees request a union, usually in the form of signing a card or a petition. After the National Labor Relations Board (NLRB) approves the request, a secret-ballot election is held. If more than 50 percent of the employees vote for unionization, then a union is usually formed unless there are circumstances such as an appeal. A second procedure called a “card check” offers a different route; that’s when over 50 percent of workers request unionization. National Review explained what happens next: “The employer can choose to recognize the union, and it’s formed without a secret ballot. If the employer declines . . . a secret ballot election is held that requires majority support.”
The secret ballot has become a flashpoint, with surprising advocates and opponents. In decades past, unions pushed for secret ballots because they perceived a need to protect pro-union workers from threats or retaliation by employers. In short, secret ballots were a consciously pro-union measure to ensure workers could vote freely. Now, depending upon the politics of particular states and industries, unions want to make obsolete the secret ballot, which can function as an anti-union measure. That is, employees who vote secretly do not experience peer pressure or blowback from coworkers and union organizers. In some situations, this makes employees less likely to vote for unionization.
In recent years, Democrats have repeatedly introduced legislation into Congress that would automatically create a union without the step of a secret ballot or the need for employer consent. The only requirement would be for 50 percent of workers to request unionization. The legislative attempts have been unsuccessful so far. If the unionization in Chattanooga had succeeded, however, it would have established precedent, bypassing legislation altogether. It would have also made a crack in the barrier that has prevented the unionization of foreign manufacturers in the South. Unfolding the Chattanooga event reveals modern labor-union strategy.
The Pivotal Event
In February, the UAW seemed poised for victory in Chattanooga. A month earlier, it had publicly declared a victory by claiming that card check had demonstrated that a majority of workers wanted the union. It asked Volkswagen’s management for official recognition. But eight workers complained to the NLRB, reporting that the UAW had used thug tactics and misrepresentation in the ballot-casting. They also accused the management in Germany of threatening to cut the flow of work to the Chattanooga plant unless unionization occurred.
That might be the most interesting aspect of the story. As the Washington Post asked, “The German company is campaigning for the UAW, not against it, in a kind of employer-union partnership America has seldom seen. What gives?” Most foreign manufacturers oppose unionization of their American plants because it would usher in expensive benefits packages and weaken their control of workplace practices, such as hiring and firing. But labor practices in Germany are union-friendly. Volkswagen was undoubtedly targeted because the company is open to establishing a German-style works council, which would have been the first of its kind in America. A works council consists of blue- and white-collar employees who are partners in management decisions on issues such as productivity and workplace conditions. American labor laws, though, make this arrangement illegal without unionization. Specifically, federal NLRA statute section 8(a)(2) prohibits so-called “company unions,” which the VW works council would be categorized as.
The most powerful pushback against the UAW came from state officials who believed unionization would harm Tennessee’s economy and make the state far less attractive to business. One of the obstacles officials erected was a 2011 state law on secret ballots and the “selection of exclusive bargaining representative(s).” The law states,
Should employees and employers seek to designate an exclusive bargaining representative through an election, they have the right to a secret ballot election; if a secret ballot election is chosen, no alternative means of designation shall be used.
The state law has been called unconstitutional because it may contradict federal rules on unionization. Nevertheless, the state law clearly indicates Tennessee’s opposition. State Sen. Mark Green, the vice chairman of the Senate Commerce Committee, also called for Volkswagen to facilitate a secret ballot to protect workers’ privacy and shield them from intimidation. The likelihood of intimidation increases because most petition signatures are generated employee to employee, face to face. Green argued, “You’ve got seven guys standing around you who work with you every day and they’re saying, ‘hey, sign this card.’” Green concluded, “We don’t elect the governor that way, we don’t elect our representatives that way, the ballot is secret. That’s democracy.” The senator also claimed to know of four large manufacturers that were monitoring the Chattanooga situation before committing to expansion within Tennessee.
Gary Casteel, the UAW’s regional director, denied the charges of union intimidation and threw the accusation back at the state government. A secret ballot, he argued, would give “outside interests” a 40-day window in which to take out ads and otherwise communicate anti-union messages to VW workers. By contrast, Casteel claimed the cards in the card check would carry a simple, self-explanatory message and not be confusing.
On February 14, the Chattanooga Volkswagen workers cast a secret ballot. They defeated unionization by a vote of 712 to 626. The defeat occurred even though Volkswagen had signed a neutrality agreement, pledging not to interfere with the UAW’s efforts; such agreements are considered to be endorsements of unionization. Volkswagen workers also defeated unionization despite a strong drive by the UAW that included public support voiced by President Obama. They defeated it even though the NLRB facilitated the election by fast-tracking it. An anti-union campaign headed by Sen. Robert Corker, Jr., and Tennesseans’ concern about unemployment, prevailed.
Predictably, the UAW has appealed the February 14 results and seeks a revote. The union accuses state officials of “dirty politics.” For example, it argues that officials threated to withdraw state-financed incentives if Volkswagen workers unionized. As of this writing (March 27), the NLRB has set a hearing for April 21, but delays are probable. Rejecting the vote would mean rejecting the solid precedent of siding with the voice of workers. Accepting the vote would mean undercutting labor unions on a matter that may be key to their future. Whatever the decision, union politics in America is changing.