The United Auto Workers union bosses find themselves unable to control rank and file members for many reasons, one of which is Michigan’s Right to Work Law. With workers having a choice about union membership, many are choosing to refrain, and the UAW is having difficulties meeting its annual budget. Joann Muller has the story in Forbes.
Ford isn’t the only place the UAW has run into trouble getting rank-and-file members to ratify the contract their leaders negotiated.
All this is coming against the backdrop of the new right-to-work law in Michigan, home to about half the industry’s unionized workers. The law makes it illegal for employers to require employees to pay union dues. Some who are dissatisfied with the contract might use the occasion to drop out. The stakes are high for the UAW, which depends on annual dues – about $550 per employee – to help fund its $214 million annual budget.
None of this should come as a surprise, really, considering that the UAW reluctantly abandoned one of the most basic principles of union membership – equal pay for equal work – when it agreed in 2007 to the introduction of a lower pay scale for new hires.
One is that the financial situations at General Motors GM +0.00%, Ford and Fiat Chrysler Automobiles have diverged to the point where the clout the union once wielded from so-called “pattern bargaining” is gone. Today, almost half the vehicles produced in the U.S. are built by foreign automakers in non-union factories, so the UAW no longer sets wage levels for the industry. There is no pattern any more; it all depends on regional labor rates and the profit margin on whatever vehicle workers are building.
Union leaders themselves are also to blame. They made a critical mistake by not properly managing expectations of their members. The auto industry is booming, with near-record profits.
. . . “Even if the union was the strongest union on earth, and it’s not, the countervailing pressure from Mexico, Canada and the rest of the world means you can’t get everything back,” she said. “You get jobs or you get money. But you can’t get both.”
UAW Vice President Jimmy Settles, who heads up the union’s Ford department, acknowledged as much, saying he worries that Ford will move jobs to Mexico if the union goes back to the table demanding higher wages. “Some people think you just go open door No. 2 and see if something is behind there,” he said. “That’s not how real negotiations go.”