Phil Biggs covers the automotive industry for NewsTalk 1340 WJRW
February 26, 2014 – 8:30 pm ET
CHATTANOOGA, Tennessee. – By all accounts, Bob King and the UAW leadership were not expecting the decision they got recently from the Volkswagen workforce in Tennessee. The outcome validated yet another certainty about the American worker: “If you make me pay dues, you had better prove to me at least you’ll do what you say you’ll do.” Even after years of recruiting efforts and millions of dollars of expense in Chattanooga, in the end the UAW could not effectively prove it would make a positive economic difference in the lives of those Volkswagen workers. Here are a few observations:
The UAW refuses or is unable to define a true value proposition. Threatening work stoppages, publically demonizing the OEMs, or fighting for the “rights” of those workers who violate company policies equates to little or no value for the majority of UAW members. As an operating framework those tactics had little relevance even in the 1940’s or 1950’s. Today there is enormous transparency in the workplace, information travels too fast and is too readily available, and workers already have a strong voice at most places of employment in the U.S.
A better course of action for Bob King and the UAW would be to address the real and present workplace issues – sponsoring technical programs that build trade skills, training in robotics, laser welding and systems programming, and promoting other ways to create value on the shop floor. And King should be encouraging workers to shift their thinking to more risk-based compensation plans that include profit-sharing and 401-K plans versus traditional, unaffordable pensions. These kinds of topics would be conversations of real value in the 21st century labor discussions.
What the UAW says and what they do don’t match up. For the most part, unions spend 90% of their time protecting the worst-performing 10% of the workforce. That equation not only doesn’t provide value to the majority of workers, it doesn’t jibe with what they profess to their members or to the American public at-large. The UAW talks about worker inequality, and a compelling need to organize. Where? Why? Their public outcries of worker abuse, unfair pay, and unequal treatment are mostly clever diversions that really only speak to how broken their strategies are.
In truth, the UAW is not speaking to any real needs of today’s automotive workers. Perhaps it’s time for the UAW and labor generally to create new tools, something other than picket signs and hyperbolic claims of human rights violations, and start talking about how they will better equip workers with the ever-changing skills that are necessary to meet the evolving manufacturing requirements of a fast-paced industry.
Unions would have more credibility if they were politically neutral. For many decades the labor unions have cast their lot exclusively with the Democratic Party. In our hyper-partisan political climate here in the U.S., choosing to align closely with one side over another leaves at least 50% of your potential constituency unserved. In the UAW’s case, it would be smarter to stick to issues related to the automotive industry rather than devoting a disproportionate amount of time and member dues to the partisan causes of liberal Democrats. Until they discover their “21st century purpose” on the shop floor, unions will continue to be old news, propped up by liberal Democrat leadership who see much of their influence waning. In most jurisdictions, unions stopped looking out for the workers a long time ago, as they focus instead on political efforts rather than helping companies make much-needed productivity gains. Only the Democrats seem to miss this point.
The impact of the right-to-work movement. The UAW and other unions argue that right-to-work laws create a race to the bottom that leads to lower wages and deteriorating safety and health conditions for workers. But right-to-work has flourished in key southern U.S. states where foreign OEMs such as Toyota, Volkswagen, BMW, and Nissan have successfully invested significant manufacturing resources. For years in many southern precincts there has been pressure to reject the union, as Republican controlled states such as Tennessee, Alabama and South Carolina experience more economic success than northern Democrat controlled states such as Illinois, Pennsylvania and previously Ohio. Recently, more of the rust belt states in the Midwest have pushed for right-to-work status, including bellwethers Michigan and Indiana.
Right-to-work states are where the manufacturing jobs are heading and will continue to do so. Meanwhile, the UAW and other affiliated unions continue to struggle. Besides being unable to overcome the right-to-work tidal wave, clearly the biggest challenge facing the UAW is that Volkswagen, Toyota, Honda and Nissan are all excellent employers, and their workers see those companies as socially responsible corporate citizens and well-managed places to work.
Unless they are willing to re-think their political alignment and economic purpose, fixing the UAW looks to be more challenging than fixing Chapter 11 General Motors and Chrysler was several years ago. A new purpose and a wider political net would be a good start, along with abandoning every hint of coercion and corruption. And they should re-establish trust not just with their members but with the American public at-large.
The UAW would gain profoundly if it gracefully walked away from Chattanooga and accepted defeat. Tinkering with the system to rig an appeal only demonstrates their desperate motives to put member dues ahead of the real needs of today’s autoworkers. Most of all, the time for class envy is behind us and what is emerging today is a real need for unions to set aside the fear and loathing tactics of last century.
Phil Biggs is Partner, Automotive Markets, for the Bethesda, MD-based management consulting firm The Highland Group.
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