Magazine | March 21, 2011, Issue

The UAW’s Last Gamble

It’s targeting foreign automakers to strong-arm them into accepting unionization

As government-employee unions fiercely defend their perks in Wisconsin, private-sector unions are close to giving up the ghost. One of the few that remain powerful is the United Auto Workers, thanks largely to the recent auto bailouts. Yet even the UAW has been hemorrhaging its lifeblood — dues-paying members — and its condition grows ever shakier.

Now the UAW is launching a desperate gamble: an all-out, no-holds-barred campaign to organize foreign-owned automakers’ factories in the United States. And we do mean no-holds-barred: The UAW has threatened to denounce automakers that resist its efforts as human-rights violators — and it is enlisting allies for this fight.

The UAW is in dire straits. By 2009, it had only 355,000 members, down from a high of 1.5 million in 1979. UAW president Bob King has publicly acknowledged the urgency of the union’s latest campaign. Speaking to an audience of 1,000 union members at a Washington conference in January, he said, “If we don’t organize these transnationals, I don’t think there’s a long term future for the UAW — I really don’t.”

The vast majority of American plants owned by foreign auto companies are located in right-to-work states, where the UAW has repeatedly failed to attract new members. So the union is now set to launch a corporate campaign — an attack on non-complying companies’ reputations, intended to pressure management, not workers, into unionizing.

A union doesn’t conduct a corporate campaign alone, lest it reveal its self-interested motive in unionizing a company. Instead, the attack will come from groups allied with the union — including environmental NGOs, human-rights activists, liberal religious groups, and self-styled consumer advocates. When different groups go after a company for seemingly unrelated offenses, from its safety record to its environmental practices, the coordinated nature of the attack remains obscured.

The UAW has the wherewithal to fund such a campaign. Despite its falling membership, it is still one of the richest unions in the country. It has a substantial war chest in the form of an $800 million strike fund, and it has pledged an initial $60 million for the organizing campaign. As King said recently, “We have, in many ways, pretty deep pockets in terms of what we’re willing to spend. . . . We have really unlimited resources to devote to this.”

The first and perhaps most important step in a corporate campaign is for the union to frame the debate. To this end, the UAW has sought to define what makes a union election free and fair. Earlier this year it released its “11 Principles for Fair Union Elections.” As you’d expect, the principles stack the deck to favor unionization. The principles include speech restrictions for employers, binding arbitration whereby a third party would write the first contract between an employer and workers, union access to company records, and the potential for card-check organizing.

Card check? Yes, the horribly misnamed Employee Free Choice Act (EFCA) may have died in Congress, but its hugely unpopular card-check provision lives on elsewhere. The UAW’s ninth principle, entitled “Secret Ballot,” concedes that a secret ballot is “acceptable,” but goes on to state: “The parties [i.e., union organizers and management] may select an alternative method on a case-by-case basis that reflects the best process for demonstrating employee wishes.” There is no way to ensure that cards favoring a union have not been obtained by undue pressure or intimidation — practices that the secret ballot was designed to eliminate.

#page#Why would an employer agree to such an unfavorable arrangement? That’s where the corporate campaign comes in. The UAW’s sixth principle encapsulates the union’s strategy. It states that the “UAW will explicitly disavow . . . messages from community groups that send the message that the company is not operating in a socially responsible way” — but only if “management will explicitly disavow . . . messages from corporate and community groups that send the message that a union would jeopardize jobs.” The UAW’s message is clear: Oppose us and we will use third-party groups to demonize you until you agree to a card-check procedure.

King tipped his hand in January, openly stating, “If a company makes the bad business decision to engage in anti-union activity, suppress the rights of freedom of speech and assembly, we will launch a global campaign to brand that company a human-rights violator.” The UAW has already hired Jesse Jackson, who has years of experience in pressuring corporations with accusations of racial discrimination (whether real or imagined makes no difference) and threats of bad press or an organized boycott. If the targeted corporation hires Jackson to “consult,” and “donates” to his Rainbow/PUSH coalition, the threats disappear. That is the type of attack that can be expected from the UAW on foreign carmakers in the near future, except that the tribute it exacts will not be a simple payoff but an agreement to let the union organize a company’s workers, yielding millions in dues for years to come.

Actions taken by the Obama administration have paved the way for the UAW’s use of accusations of human-rights violations as a club. Last year, the administration submitted a self-evaluation to the U.N. Human Rights Council — which includes such enlightened countries as China, Cuba, and Saudi Arabia. The report said that the extent to which the law facilitates unionization should be a human-rights matter, and that the United States falls short in this area.

Obama and King have recently become very close. The Obama administration secured the UAW’s support for a free-trade agreement with South Korea only after amending the treaty to weaken its provisions reducing barriers to trade in automobiles. Then in February Obama appointed King — no free-trader — to his Advisory Committee for Trade Policy and Negotiations. It should not be surprising to see King flaunt his ties to the president when dealing with the foreign automakers.

The UAW is likely to claim that auto workers in right-to-work states are poorly compensated. That is not at all the case. It’s not lower compensation, but freedom from burdensome union work rules, that makes companies like Toyota more competitive in the U.S.

The UAW may not go after all foreign automakers at once, but the union is playing a long game. Its tactic is to divide and conquer. Once, say, Toyota falls, Honda, Mercedes, BMW, and the others will be easier pickings. And what is perhaps most troubling is the possibility that the Obama administration may be actively helping the UAW achieve its organizing goals.

The administration has already gone out of its way to tilt the playing field in the unions’ favor. With the EFCA having failed to make it through Congress, it has sought to enact card-check-like organizing rules through the National Labor Relations Board (NLRB). For example, last June the NLRB asked vendors to submit proposals on how to conduct electronic remote voting in union elections. While the NLRB claims this would be a secure system, it would not be difficult for a union organizer to hand a worker a laptop or other handheld device and look over his shoulder as he voted.

The NLRB is supposed to rule on existing labor law, not amend it. Congress should take a close look at the UAW’s ties to the administration and should oppose any rule changes the NLRB might push through to help the UAW achieve its goals. And foreign automakers should defend themselves against the union’s PR-oriented strong-arm tactics.

– Mr. Vernuccio is labor-policy counsel and Mr. Murray is vice president for strategy at the Competitive Enterprise Institute (CEI) in Washington, D.C. CEI labor-policy analyst Ivan Osorio also contributed to this article.

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