Congress returns after Thanksgiving to decide whether to approve a $25 billion loan to General Motors, Chrysler, and Ford. The future of United Auto Workers members in Michigan and other states is at stake.
“It appears to me we possibly have one too many auto makers,” said Sen. Bob Corker, R-Tenn., who opposes the loan.
But he said, “even if they went through Chapter 11, there will be U.S. auto makers in this country. I don’t think there’s anybody in this country that really thinks if they went through some re-organization that we’re not going to end up with U.S. auto makers at the end of that. We are.”
But it will be an industry in which fewer workers are represented by the United Auto Workers. And that doesn’t cause Republicans like Sen. Jeff Sessions, R-Ala., any regret.
“I think the United Auto Workers and some of their wage demands and work habit demands have hurt the industry,” Sessions said.
One advantage the Honda and Hyundai plants in Alabama have over the General Motors, Chrysler, and Ford plants in Michigan is lower labor costs. That's because, in part, auto workers in Michigan are represented by the UAW and workers in Alabama aren’t.
Unionization and the labor cost differential
This cost differential has been a theme of the debate this week in Congress over whether taxpayers should subsidize GM, Ford and Chrysler.
But what if the UAW could more easily organize workers at Honda and Hyundai? UAW-represented workers at Honda and Hyundai could then bargain for higher wages.
The Employee Free Choice Act, passed by the House of Representatives last year, but stymied in the Senate, aims to make unionization easier by allowing workers to join a union by signing a card rather than by going through a secret-ballot election. The bill is called “card check” for short.
This week, as the newly elected representatives and senators arrived in Washington to go through their orientation seminars, they were greeted by full-page ads in Capitol Hill newspapers such as Politico.
“Congratulations, President-elect Obama. You were elected by secret ballot. Don’t take it away from millions of American workers,” proclaimed an ad run by the Coalition for a Democratic Workplace, an alliance formed by the U.S. Chamber of Commerce, the National Association of Manufacturers, and other business groups.
GM's future at Lordstown, Ohio
A UAW ally, Rep. Tim Ryan, D- Ohio, said enactment of the Employee Free Choice Act “would level the playing field. Each facility would be competing on the same playing field.”
He noted, “We have a (GM) facility in Lordstown, Ohio, where I’m from. GM just moved a lot of their production to build the new ‘Cruze’ in that facility and added a thousand jobs three or four months ago, and they just took them away” due to the economic distress.
“It’s a union plant; the union worked with GM; they took some concessions, they made the deal work, and GM invested in the plant,” Ryan said.
Given the UAW members’ willingness to cooperate at Lordstown, Ryan said, “It’s hard to say that somehow the South has an advantage.”
If the “card check” bill became law, then “I suppose they could share the misery and everybody could be stuck with $70 an hour labor costs,” said Sen. Jon Kyl, R-Ariz., sardonically.
The view from Flint, Mich.
But UAW ally Rep. Dale Kildee, D- Mich., who was represents Flint, Mich., the city where GM was born, said that joining a union is only the first step.
“After you get recognized, you still have to bargain,” he pointed out. “You can get recognized under the Employee Free Choice method or the election method. It’s what happens afterwards in the bargaining that really determines the differences (in wages).”
He added, “I think eventually the South is going to be organized. Under a Democratic House and Senate and president, the ability to organize could be enhanced. But you’d still have difficulty organizing in the South.”
Kildee’s father was a UAW member who worked for Buick Motors in Flint.
Kildee, 79, said, “I’m old enough to remember the sit-down strike in Flint in 1937 and the difference in the Kildee household before the UAW and after the UAW. Life was a lot better after the UAW. So I am very pro-union.”
Thea Lee, the policy director for the AFL-CIO, said, “There’s been a lot of criticism of the union for the wages and benefits. But isn’t that what we want for more workers: to have good wages and pensions?”
She noted that in the South “some of the transplants (Honda, et al.) have offered very good wages, by the standards of Alabama, Kentucky, and other states, in an effort to say to workers, ‘you don’t need a union.’”
The shrinkage of GM, partly due to competition from Honda, Hyundai, and other plants in Alabama and other states, has decimated the UAW.
And, of course, there’s a political aspect to this: the UAW has long been a bastion of strength for the Democrats.
The UAW’s political action committee spent $11.5 million to help Democratic candidates this year.
Decline in UAW membership
The UAW's political clout will wane as its membership does. The UAW hit a peak of 1.5 million members in 1979, but declined to about 460,000 at the end of 2007. “In Flint, we used to have 80,000 GM employees now we have about 18,000,” Kildee noted.
An early vote on the “card check” bill in the new Congress is a top priority of labor unions.
Asked how he’d vote on the bill, Democratic Representative-elect Bobby Bright, who won what had been a Republican seat in Alabama, said, “I’m not going to do anything that is going to harm in any way the growth of our businesses” in his congressional district.
Bright's southeast Alabama district is home to a Hyundai manufacturing plant and is right next door to a new Kia plant across the state line in Georgia.
“I really do appreciate the sanctity of a private ballot,” Bright said Thursday. He said he is “leaning heavily against anything that would challenge the sanctity of the private ballot.”
Bright’s campaign received $10,000 in contributions from the UAW political action committee, but he said, “If they did, I’m not familiar with that.”
The House vote last year to pass the Employee Free Choice Act was 241 to 185.
When the new Congress meets in January, the bill is sure to get even more votes since the Nov. 4 elections expanded the Democratic majority.
House Speaker Nancy Pelosi will not need Bright's vote to pass the bill, nor those of other Southern Democrats.
But it's the Senate where its fate will be decided. Last year, the bill fell nine votes short of getting a 60-vote filibuster-proof majority in the Senate.
Then-senator Barack Obama voted to move ahead with the Employee Free Choice Act. No Democratic senators voted to block the bill; only one Republican, Sen. Arlen Specter of Pennsylvania, voted to advance it. In the vote next year, Republicans up for re-election in 2010, such as Sen. George Voinovich of Ohio will be under pressure to vote for it.
Sessions shudders at the thought that the bill will be passed year and be signed into law by Obama. “Card check would be unthinkable,” he said. “What I’m seeing with the good morale of the workers in Alabama, they don’t have to have a union to be well treated.”
The vote next year on the bill is one more reason why the still-undecided Senate elections in Georgia and Minnesota are so crucial.
The Georgia run-off election is Dec. 2, one week from next Tuesday. The Minnesota recount is under way and may be finished by Dec. 19.