When will unions come around?

There must be a lot of frustrated economic developers in Milwaukee these days. Before I make my point, you need to understand that Milwaukee has had one of the most challenging economies of any urban area in the USA. From 1990 to 2005, the population has dropped from 628,088 to 578,887 – at a time when the vast majority of urban centres over 500k population are either increasing or at least maintaining population.

So along comes a tailor made economic development project. The city’s largest manufacturer wants to build another large scale plant. Hallelujah. But there’s a catch. In keeping with its normal practice, Harley-Davidson had advised its international and local unions of the need to add capacity and to do so in a way that would significantly reduce future costs and improve flexibility. This meant that new hires (not existing employees) would have lower starting wages than before (the actual wage rates proposed was not made public) and the health care plan needed to be adjusted to try and curb rising costs.

The union nixed the idea and Harley Davidson announced it would build the plant elsewhere.

Now, I am not privvy to the deal but let’s be clear – Harley Davidson is a premier employer paying top notch wages in that city. So, the cuts they were proposing were likely modest. But the union would rather the jobs go elsewhere than take the cuts. Remember, current employees were not on the table – this was about new jobs.

So, one of the poorest economic performances in the past 15 years (Milwaukee) and the union doesn’t give a crap.

I remember almost a decade ago I was over at the Moncton Club with a client and he had just left with the real estate agent. I was sitting at a table when an old guy sidled up to me and wanted to chat. He had probably drank too much but I sat and listened. He used to run a manufacturing plant in Moncton in the 1970s, he said, but one day the national union decided they wanted a ‘national wage rate’ for their unionized workers. So the plant in Moncton closed within 18 months and moved to Ontario because the previous wage differential of a couple of bucks an hour had offset the increased transportation costs. He was forced to move with the plant and had retired back to Moncton. He told me that numerous other plants in the same situation did the same thing. He was quite bitter.

But that experience (and this one) made me hearken back to my college days in the late 1980s. I had a particular interest in unions and even lead the union bargaining team in a semester long union-management negotiation that made up 50% of the grade in one of my classes. I then went on to write a major report in my MBA program on union/management relations where I hypothesized that unions could become key partners in helping industry manage the ups and downs of the business cycle. However, my experience with unions in the past 15 years of economic development has not been positive. In addition, to these examples, I remember a union guy in Miramichi (a long time ago as well) saying he would close the mill before accepting a dollar an hour pay cut.

Unions see protecting and expanding wages and benefits as central to their mandate. Fair enough. But at the expense of putting the company out of business? Or forcing it to close its facility in Moncton and move it to Kingston? Or denying a Harley-Davidson plant which will be coveted and fought over by dozens of communities in the coming months?

Union membership is crumbling in both Canada and the United States. Some have already read the eulogy for the union movement saying it has run its course. I don’t know about this. I do know that probably 700k or so people in Milwaukee are right now pretty pissed off at unions. I know that there are probably a few Michiganers that are pissed off that all the new auto plants were built in the southern US to avoid the UAW.

I just don’t understand this. The union movement should be an economic development tool. It should use its position to support economic growth in areas such as New Brunswick.

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0 Responses to When will unions come around?

  1. Anonymous says:

    That makes no sense. Why should an organization whose mandate is protecting and enhancing the needs of its members have YOUR mandate? Why would anyone expect them to not worry about the hundreds of years long struggle for workers rights and throw their hat in with corporations who have been abusing those rights for centuries?

    Perhaps when corporations start worrying about their workers and not using them as disposable wage slaves then it will be different, as it is, the experience of modern corporate capitalism leaves a lot to be desired from a workers point of view.

    And of course every union is different, as is every union issue, as is every union leader. Go ask a postal carrier what they think of their union. You would have got a far different answer twenty years ago, but that’s all thanks to labour legislation, not union demands.

    As for Harley, again, why should the workers care that a new factory will be built and whose salaries are not even disclosed (sort of reminiscent of yesterday’s paper where the Telegraph ‘hypothisized’ about Irving Refinery pay rates because Irving won’t disclose them-think that’s because they’re paid too much??)

    What’s to say that that new factory doesn’t suddenly start ‘replacing’ the old one? Not a thing, and Harley is far from a stable bet, in the motorcycle game they are well remembered for the eighties when Japanese imports voluntary scaled back production because their horribly overpriced bikes were leading them to bankruptcy.

    And keep in mind one thing, at least decisions like that are open to union votes, whens the last time you got to vote on a governmental piece of legislation that might enhance a company/industry? Think Wal Mart employees get votes on decisions that affect the company’s labour practices?

    If you aren’t IN a union (and judging from what you’ve said about your past in ED) then you are always looking at it from the outside (much like provincial politics I might add). That means you don’t have the information.

    As for Moncton, that’s an excellent issue and I’m glad you brought it up, I’d never heard of a ‘national wage rate’ for unions..do you know what unions? That’s an excellent point and one I’d like to do more research on it.

    But anybody that thinks ‘national’ unions have the interest of minority parties in mind don’t know much about ‘democracy’. Unions function on a similar pattern as politics, which means ‘those with the most votes wins’. Again, thats all set by labour legislation, NOT by unions. Letting a union swallow a smaller union is not even allowed in most countries, but is welcomed in Canada because large unions are easier to control (see the postal example).

    What workers in Moncton would vote for a deal that would see their pay increase a couple bucks, but then relocate to ontario is doubtful.

    Where unions fail is the same places where governments fail- lousy legislation. Unions are getting much less of a bad rap, mostly because the pay differential for blue collar workers is now so extreme that the only ones who now buy the union hating line are those with good jobs. There’s a reason why all over the continent people are risking their jobs for unionism, and again, its that ‘team’ of government-business that continuously ignores the workers. That suddenly they will ‘stop’ representing workers and start representing ‘society’ or even management seems an odd idea.

  2. David Campbell says:

    Read Bob Rae’s piece in MacLeans this week. Forget that you think he is a traitor to the NDP and just read it. You can be pro-union and progressive. Unions used to be change agents in society – now they are roadblocks. I realize this is a cliche and trite but I still think that the union movement has not been introspective in years. It continues to fight battles around wages, benefits and working conditions as if they were in the adversarial labour/mgmt environment of 100 years ago. Look around. Workers are in demand. There are increasing shortages. Unions circa 2006 need to be about progress. They need to be solutions-oriented. They need to be broader than wages/benefits/working conditions which don’t mean crap if the pulp mill closes. I will never waver from my believe that wages should be tied to the success of organizations. I have a bonus structure which is based both on my personal performance and the performance of the firm. When Harley-Davidson has an exceptional year, its workers should benefit. Likewise, when HD has a very difficult year, workers should share the burden. You will scoff at this but if you study this issue enough you will see that all these unionized industries such as airlines, forestry, auto, even the public service would have been better served with unions as their partner not the enemy.

    As I said, I studied this issue in depth in the 1990s and at that time, unions were negotiating a seat on the executive of the company and starting to play a much more proactive role in the management of the firm – of course from the perspective of the workers – but understanding the business cycle issues.

  3. Cooker Boy says:

    Hello Mr. Premier… Please call HD right now!

  4. Anonymous says:

    I have no opinion of Bob Rae one way or another. Unions HAVE always been progressive instruments of societal change, but primarily because the situation of workers was so bad. That was ALL workers. Now that’s far less that case and is dependant on industries and even companies within industries. In southern ontario you don’t find huge inroads at Toyota or Honda to bring in unions. The people make a decent wage and are treated decently, even in job rich southern ontario they are highly sought after jobs.

    But there’s no point in arguing what unions SHOULD be doing IF they had the protections that they are bargaining for. Show me ONE company that has profit sharing, job protections, high labour standards AND a workforce looking to unionize. If you can find one I’d be surprised.

    Of course we are RAPIDLY swinging back to the days of the thirties and the days when unions WERE agents of social change, and thats because service groups are started to talk unionization because most of these people are barely getting by. Yet even at the peak of social change it wasn’t unions pushing it, it was legislation. The biggest labour gains didn’t arrive until after World War Two. Soldiers remembered well what happened after the first world war and their fathers became criminals in their own country because they wanted a decent life.

    When Saskatchewan elected a nominally socialist government everybody flipped out. That wasn’t unionism, because socialism has no use for unions, and it always amuses me when people talk about trade unionism as though it were a feature of marxism.

    Unions have NEVER been about societal change, they derive from the old guilds which were so self involved that they were practically cults. If you take a look around now, unions have zero clout in the economy, except the government ones.

    Like I said, unions, unlike corporate canada, are even more democratic than our own government. Union members vote for leaders, as well as resolutions, which in most cases the leader is bound to. So again, we here in Canada don’t vote on issues in the states even though we have a vested interest, likewise, a voter in a union MAY look at societal issues when deciding resolutions, but will obviously look at putting food on his family’s table first.

    For an example just look at Nackawic, that union pretty much dissolved and simply said ‘we’ll take whatever you’ll give us’ because they knew damn well the alternative was leaving. And WE may argue and say “but don’t you see, forestry is not the way of the future, you have to give it up” and all kinds of such things-which may even be true, but at the end of the day, that worker, and that union, is going to vote for whatever is in their best interest.

    IF we lived in a society where the alternative wasn’t poverty then maybe we could expect different. But we don’t even get anything different from basic human selfishness even from McCains or Irvings, two families who have it in their power to address all those issues you raise, but choose not to. For the basic simple reason that human nature dictates that ones own needs come first. You can build a society without that, many have, but that’s not close to the case in ours. So why expect an organization to abandon its principles for larger principles of its opponents?

    Keep in mind another example, that unions were lobbying from the mid nineties that the massive growth in lumber gains were short lived and that companies should reinvest in technology. That WAS an example of going somewhat beyond their own limited self interest. THe companies didn’t listen, and now we know why. So if you WANT to get beyond those cliches, subscribe to some union magazines and find out what they are saying (again, the Maritime Fishermans union), and they are all recommendations for societal self interest-because it derives from gains to workers, NOT investors (they usually don’t even live in the province and don’t give a *&^%)