Commentary: Will Common Sense Prevail at the Auto Talks?

Maybe not, if the dust-up at Chrysler is any indication.

by on Sep.16, 2011

Chrysler CEO Sergio Marchionne.

I have been hoping that the United Auto Workers and the Detroit car companies would reach quick, amicable agreements in their current round of contract negotiations.  Even though Chrysler and GM – where the union seems to be initially focusing its attention – can not be struck under terms of their 2009 federal bailouts, no one needs the drama of an impasse.

But that may be precisely what we’ve got.  As TheDetroitBureau.com first reported earlier this week, leaders of the United Auto Workers Union have put on hold talks at Ford, where a quick settlement seemed unlikely.

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But more worrisome, UAW Pres. Bob King appears to have created a real dust-up by missing a key appointment with Chrysler CEO Sergio Marchionne – who canceled a European meeting with German Chancellor Angela Merkel to return to Detroit. A letter from Marchionne suggests that the UAW chief only hurt his workers in the process.

It is, to my mind, one more example of the union’s increasingly questionable way of doing business, especially in a recession, especially in the Age of Wal-Mart.  Simply stated, no one gives a damn about organized labor’s notion of “solidarity,” which is why Wal-Mart remains the world’s largest retailer.

I’ve visited nearly every Wal-Mart super-store in the Deep South, Mid-Atlantic, Northeast, and Mid-West. I’ve run into people in those places who complained mightily about Wal-Mart’s alleged mistreatment of its employees. I’ve yet to meet one willing to turn down a good Wal-Mart deal on a flat-screen TV, or on any other desirable item.

Therein resides a big problem for unions in general, and the UAW in particular.

The unions are competing against the Wal-Mart Theory of Self-Preservation…and losing.

The theory is crass in its simplicity. It assumes that everyone wants to get something for nothing, or as much as possible for as little as possible, even if it is acquired at the expense of someone else, such as union members, or something else, such as collective bargaining.

The theory works best in private enterprise, where competitive pressures work against higher operating costs. Example: If stores “A” and “B” are selling essentially the same sweater at a higher price than Wal-Mart, I’m going to buy that sweater from Wal-Mart, especially if I am worried about my next paycheck.

Union membership might guarantee a paycheck, or some semblance of a paycheck in an economic downturn, but the Wal-Mart Theory of Self-Preservation is not concerned about that. In pursuit of what it construes as a better deal, it will undermine its long-term self-interests.

Consider the history of organized labor. Without it, we would not have had a middle class– good salaries and benefits; good working conditions; equal pay for equal work regardless of race, religion, or gender; all powerful stuff that helped to create a society where working stiffs could send their children to college, educate the next generation of doctors, lawyers, even journalists.

The proof is all around us—living, breathing proof. And nowadays it’s all under attack. I have my theories about why that is the case. I’ll get to that later.

Right now, I want to discuss what actually happens with the Wal-Mart Theory of Self-Preservation. You need a sweater. Wal-Mart is offering some pretty samples sewn by non-union seamstresses, maybe by people working in China, Nigeria. You don’t really care. You want that sweater and you want it at the best price available, which Wal-Mart is offering.

You buy the Wal-Mart sweater which, actually, is why its American designers and the American-owned company responsible for its manufacture had it made in China… or any place where the labor is cheap and not complicated by union membership. Never mind that the bargain you made makes it difficult for you and, ultimately for any other working stiff, to get higher pay for sewing sweaters, or better conditions under which those sweaters should be sewn.

You wanted a deal. You got it.

And it matters not that you belong to a union, or that you’re proud of your union membership, or that you get all warm and fuzzy when you shout “Solidarity Forever!” Solidarity takes a back seat to your need for a price break, now; and Wal-Mart is offering it.

This happens every day. I’ve seen it. You’ve seen it. We’ve all done it; and we’re doing it more in these economically pitiful times.

It’s a matter of self-interest. We are all looking for the best deal, now—even if the acquisition of that deal ultimately works against sustenance of the institution of organized labor.

That is a really big problem for the UAW. Here’s why.

The UAW has failed miserably in its attempts to organize the many Wal-Mart-like operations of the automobile industry—BMW, Honda, Hyundai, Kia, Mercedes-Benz, Toyota—all of which have thriving manufacturing and retail operations in the United States. Heck, non-union Hyundai is even bragging on national TV that it has laid off none of its employees in the current economic downturn. No UAW-represented company would dare make that claim.

The failure of the UAW to organize its non-union manufacturing rivals puts Chrysler, Ford, and GM at a distinct cost disadvantage, and thereby weakens the union’s bargaining clout. But the real problem is that the car-buying public, the invisible third party at the bargaining table, does not give a damn.

Back to Wal-Mart: Consumers have demonstrated over the years a passionate willingness to shop at Wal-Mart as long as Wal-Mart is selling them what they want and need—immediately what they want and need—at what they consider a fair price.

To be brutal about it, that means:

  • Most buyers don’t care about any “solidarity” that has nothing to do with the solidity of their bank accounts.
  • They compare product quality. In doing so, they have been pleased to find that nearly all of Detroit’s rivals have desirable products at competitive or lower prices.
  • Consumers see themselves as essential parties to the union-management collective bargaining process, albeit not necessarily in the way that union and labor view consumer participation. To wit, from the consumer viewpoint, anything done at the bargaining table that raises product costs is a no-no. They will “vote” on such a contract the same way they “vote” by going to Wal-Mart. They will shop elsewhere with little or no concern for the “union label.”

In this milieu, it is dangerous, if not downright foolhardy, for the UAW to talk about holding the line on “givebacks” or trying to get back what was given to now modestly profitable Ford and GM, or to still-struggling Chrysler.

I can think of nothing that would do more to turn the public against Detroit and the UAW. Keep in mind that many U.S. taxpayers, rightly or wrongly, believe they “saved” Detroit at great expense to themselves. They are proud of Ford, erroneously, for seemingly exercising fortitude in not taking a federal handout. They have chosen their own truth, ignoring the well-documented fact that Ford, at the time, literally could not afford to take another loan.

Ford is the U.S. public’s corporate equivalent of “Rocky.” It defied the odds, continued fighting, and came out with inarguably winning products. Even GM is beginning to pick up some of that glow. And Chrysler, through a brilliant advertising campaign, “imported from Detroit,” has wowed what remains of the buy-America crowd (a rather small bunch in comparison with adherents to the Wal-Mart Theory of Self Preservation).

The point is, offending increasingly pro-Detroit American consumers with haggling over “givebacks” and “paybacks,” at a time when 9.1 percent of U.S. residents remain unemployed and have nothing to give back or receive, is exactly the wrong thing to do. It most assuredly would complicate the UAW’s continuing attempts to organize automobile workers in the South.

Aside: I was born and reared in New Orleans, La. I have lived, studied and worked all over the Deep South. It does not surprise me in the least that the states that separated from the Union in violent and treasonous defense of slavery are now the nation’s leading “right to work states.” It has ever been thus in the South’s historical exploitation of “free labor,” or the cheapest labor possible in pursuit of economic progress.

What does surprise me is the changed mindset of states such as Alabama, Georgia, Kentucky, Mississippi, Tennessee and Texas in their aggressive hunt for foreign-badged vehicle manufacturing transplants. In overcoming their age-old allegiance to de jure racist governance, which once colored all of their dealings with the outside world, those southern states have embraced education and advanced worker training as keys to their economic futures. In doing so they have addressed the primary concern of Japanese and Korean automobile industry executives living and working in the South: “How will our children be educated down here?”

Sadly, my home state of Louisiana continues to answer in the negative, operating on the old, shameful thinking that a good education for all means miscegenation (“race-mixing” at the crotch) for everybody. I once asked a top Korea-born Hyundai executive why he chose Alabama over my home state of Louisiana to put up a plant. His response: “We looked at Louisiana. But your educational system…sorry…still too far behind the times. We [Koreans] have families, too. We have children. We couldn’t risk it.”

What does any of this mean for the UAW?

It means everything.

It is difficult to find non-UAW automobile workers in the South, for example, who would consider paying union dues to bring the UAW into their companies. And it is not a matter of corporate brainwashing, although decent pay and benefits help. Nor is the mindset of the Southern non-union worker primarily a result of union-busting law and public relations firms, although, most assuredly, many of them are busy at work.

The simple fact is that many of those non-union, transplant workers are genuinely happy. They are getting higher wages and better benefits than they ever received as agricultural workers or as domestics. They say they no longer have to flee a racist, jobless South to ensure an economic future for themselves and their families—as many of their predecessors did in the great black migrations of the 1930s and 1940s to Detroit and other points North in pursuit of better-paying, often union-represented labor in vehicle manufacturing plants. They are proud of their current circumstances and, in too many cases, blissfully unaware of why non-union vehicle manufacturers are paying them the best wages they’ve ever earned.

Non-union automobile workers and their families do not look for the union label when shopping. Rightly or wrongly, they honestly believe they build better cars and trucks than the UAW. Other than higher costs, they demand that inquiring journalists show them—bolt by bolt, component by component–exactly how a UAW-made product is better than the products they turn out. It’s a tough sell.

That anti-union bias, and I firmly believe that is what it is, will not change with a UAW-Detroit fight just when it seems Detroit is getting its act together again.

I have a dream:

One day, at a collective-bargaining session, the UAW will shock the media and the world by announcing that it will seek no further contract gains until it has put Detroit solidly ahead of the competition. Americans will be so taken with that strategy, they will start buying American cars and trucks because they are American cars and trucks and are built and priced better than anything offered by foreign rivals. The public’s view of the UAW as an obstructionist enterprise will be replaced by one of the union as an unquestioned force for good.

Meanwhile, the UAW will continue its advocacy for workers’ rights, women’s rights, civil rights, immigrants’ rights. It will fight for closure of the growing income gap in America. And it will advance that position as a common-sense pursuit of better business—the only way we can maintain a consumer-driven economy is to have consumers with the wherewithal to drive—as opposed to a class vs. class argument.

With success in that endeavor, the UAW will go on to organize all of those unorganized car companies now eating its lunch through aggressive application of the Wal-Mart Theory of Self-Preservation. Then, and only then, will collective bargaining in pursuit of better pay and benefits from the Detroit car companies make any sense.

 

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