UAW loss to hurt efforts

Small elections can have big consequences. Voters in SeaTac cast 6,003 ballots to give a 77-vote victory margin to a $15 minimum wage. Suddenly, in Seattle and all across the country progressives are pushing minimum wage increases.

A slim majority of the 23,900 Boeing Machinists who cast ballots in January accepted a Boeing contract offer after an internal union conflict. Their votes shape the state’s economic future for generations.

A similarly pivotal election was held last week at a Volkswagen auto plant in Chattanooga, Tenn. Just 1,338 workers voted on whether to join the United Auto Workers union. The workers rejected the union, 712 to 626, potentially sinking the UAW’s Southern strategy.

The union will never meet a friendlier host. While officially neutral, VW management filed the petition for unionization, allowed organizers unprecedented and exclusive on-site access to employees.

Organizers thought victory was a lock. Other nonunion auto plants in the South pose a stiffer challenge. If VW Chattanooga is a no go, it’s not clear where the UAW can go.

These elections are consequential because of what they reveal about labor strategy. After decades of declining private sector union membership, organizing efforts are intensifying and diversifying.

Unions seeking to organize service, restaurant and hotel workers promote the $15 minimum wage, often through affiliated and relatively unregulated “worker centers.” While the boost will cost some workers their jobs, the unions see several wins. Raising the statutory wage floor shuts out young and inexperienced workers, those least likely to become union members, and drives up labor costs, reducing the comparative advantage of nonunion employers. And it boosts income for unionized workers with collective bargaining agreements linking base pay to the minimum wage.

Traditional unions face a dramatically changed industrial landscape, one altered by long-terms trends in globalization, technology, and interstate competition.

Boeing workers here recognized that the company was serious about building the 777X in a state that offered it the best chance of success. While public policies tied to taxes, regulations and operating costs played a significant role, the cost of the labor contract, especially pensions, was determinative. Employers have choices and will exercise them to assure business viability. To secure work for the next generation, the Machinists here recognized the shifting ground and adapted. By adapting, they saved union jobs, now and for generations to come.

In Tennessee, different conditions exposed a similar competitive reality. Local political leaders, including Gov. Bill Haslam and U.S. Sen. Bob Corker, who as Chattanooga mayor recruited VW, opposed unionization. They believed it would negatively impact economic development and destabilize the state’s growing automotive cluster. The message that the UAW killed Detroit resonated.

IG Metall, a powerful German union on VW’s supervisory board, wanted to form a “works council” in Chattanooga and pushed management to cooperate with the UAW. Works councils (not “worker centers”) are employee committees that work with management to develop policies on work rules and production. The councils operate in virtually all VW plants worldwide. But most analysts agree that in the U.S. they must be set up via a labor union. Otherwise, it would look like the “company union” precluded by the Wagner Act. (In 1996, President Bill Clinton vetoed legislation that would have allowed companies to organize such councils.)

The collaborative approach may have had some appeal in Chattanooga. A majority of workers initially signed cards indicating support for the union and works council, but the conflation of the two may have been confusing. Or maybe it’s just easier to get workers to sign union cards than to win their votes in a secret ballot. The Chattanooga failure likely sinks organizing efforts in the South for years. Conceivably it may resurrect the policies Clinton vetoed that will allow a new, more cooperative labor-management structure. VW still wants to establish a Chattanooga works council.

Change is coming. Last year, AFL-CIO president Richard Trumka acknowledged that organizing efforts are “failing miserably.” Organized labor is in an existential crisis, one which will produce an array of adaptive behaviors: worker centers and works councils, minimum wage advocacy, card check over secret ballots, and more. It’s likely that many of the evolving strategies will get their test run in the Puget Sound metro area.

Email rsdavis@simeonpartners.com