Free Markets, Free People


Why the UAW lost in Chattanooga

Robert Samuelson offers his analysis:

On paper, unions can deliver three things: higher wages and fringe benefits; greater job security; and better working conditions, including protection against arbitrary or unlawful management practices. In the 1950s and ’60s, unions could win these gains. Now, greater competition has eroded their leverage. Workers weighing the reduced advantages of being unionized must also consider the possibility that high-priced, rigid union labor might one day cost them their jobs. In Chattanooga, this calculus went against the UAW.

And:

Private-sector unions lost their power to protect jobs and raise incomes. Unions were caught in a vise. If they pressed for higher wages and fringe benefits, they risked destroying jobs. Companies might lose sales to lower-cost rivals; or they might move to anti-union states or low-wage countries. Even protecting existing compensation levels became hard because — in extremis — companies might fail. On the other hand, if unions abandoned traditional bargaining goals, they might infuriate rank-and-file members and be accused of “selling out.”

I think, on those two points, he’s right.  But there’s a third point he doesn’t mention that I think is just as important.  VW chose Chattanooga when it had plenty of opportunities in union states to set up its plant.  When it chose Chattanooga, it chose an area whose citizens lived in a state that believed in a “right to work” without interference from unions.  It put its plant in an area with that sort of a culture, a culture that is essentially anti-union and without the pervasive union culture you find in union states.

Additionally, as Samuelson points out, companies over the years have learned what sort of practices they must use to keep unions out, especially in the South.  Consequently those sorts of business practices have gradually made unions much less necessary and has therefore badly eroded the leverage of unions.  Take that eroded leverage to a “right to work” state and the results are likely not something a union would like, as the UAW discovered. When workers do a cost/benefit analysis, unions mostly come out on the negative side of things.  And then, of course, there’s Detroit today:

A works council may be worth trying, but whatever its virtues, they were overshadowed by the UAW’s past. Hardly anyone doubts that high labor costs and obsolete work rules contributed mightily to the crackup of the Big Three. VW’s workers recoiled; they kept the status quo. For the UAW, success in one era sowed failure in the next.

Workers saw no advantage to an association with the UAW.  It was a smart move on their part, even as they worked for a decidedly union-friendly employer.

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8 Responses to Why the UAW lost in Chattanooga

  • One of the things that has greatly contributed to the obsolescence of private-sector unions is their own success in getting special dispensations in the Federal laws respecting organizations and fostering the union movement of yesteryear.

    There are MUCH more nimble and attractive models for worker/management cooperation that are simply illegal under Federal labor laws.  The UAW is a dinosaur, and it cannot begin to adapt…by law.

  • What Rags said.  Assuming the workers wanted a union, they probably very much did NOT want a UAW style union.  But federal law says that a union can not be formed with any company resources, so all the paperwork & legal work that a new union would need to do to be recognized (as opposed to a local of an existing union) would have to be borne by the workers themselves, and the federal government has made that cost high enough to be unattractive.

  • On paper, unions can deliver three things: higher wages and fringe benefits; greater job security; and better working conditions, including protection against arbitrary or unlawful management practices.

    I’d say that’s a false sense of security. More likely it’s a high probability of company and industry failure.
    On the whole, you can get much the same from the Mafia.

  • My brother recently started a revolt at his place of work recently by opting out of the Union.  His place of work is in a “right to work” state.  When asked by union reps why he opted out he gave 3 simple reasons:
    1) Unions are strictly tenure-based organizations.  Every now and then weekend work is required.  Members with longer tenure in the union opt out, requiring others with less tenure to pull the onerous shifts.  His response was why should he pay union dues to continue the practice when he will never earn enough time to gain a higher tenured status.
    2) The place where he works stipulates pay and benefits based upon a contract with the company.  His response was he was willing to negotiate his own benefits package and paying union officials for what he would do for himself didn’t seem cost effective.
    3) The union contributes to political entities regardless of worker feelings or attitudes.  This particular union contributed exclusively to Democratic causes and he took exception to that.
    Once his status became known and the union was seen to be powerless to punish him, the stampede began.  It is unclear how many of the workers have opted out but it is a considerable number.

  • Senator Corker also claimed at the last minute, the plant wouldn’t get a new car line if they allowed the UAW.  But with the downvote, the union membership in Germany which has veto power over such things, may deny the plant the new car line.  The plot thickens.

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