John Ransom

For over a year, it’s been rumored that the United Auto Workers union (UAW) was going go after a major foreign auto manufacturer in the United States to force unionization upon them by a world-wide boycott.

A new report from Reuters, based on interviews of union and industry insiders, has indicated that the target will be not one, but two German manufacturers operating in the US, Volkswagen AG and Daimler AG.

Specifically, Reuters has learned, the union is going after U.S. plants owned by German manufacturers Volkswagen AG and Daimler AG, seen as easier nuts to crack than the Japanese and South Koreans.

It's a battle the UAW cannot afford to lose. By failing to organize factories run by foreign automakers, the union has been a spectator to the only growth in the U.S. auto industry in the last 30 years. That failure to win new members has compounded a crunch on the UAW's finances, forcing it to sell assets and dip into its strike fund to pay for its activities.      

The UAW has seen its numbers of workers shrink over the last two decades as domestic manufacturers GM, Ford and Chrysler wrestled with high labor and benefit costs compared to foreign manufacturers operating in the US.

In fact, GM’s recent financial problems were, in part, caused by pension and health plan liabilities to UAW workers, necessitating a federal government bailout. In the $95 billion GM bankruptcy, $50 billion of it was benefit liabilities to UAW workers. 

The head of the union, Bob King, has admitted that declining union membership rolls means that if the UAW doesn't "organize these transnationals [foreign auto manufacturers], I don't think there's a long-term future for the UAW — I really don't."


John Ransom

John Ransom is the Finance Editor for Townhall Finance.