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."
That’s correct. Because unless the UAW can figure out how to increase labor costs across the entire industry, foreign manufacturers will continue to beat American manufacturers in the number one cost for cars: labor. Labor costs, including benefits, put current per-hour employee cost for U.S. automakers [at] around 50 percent higher than the costs for their foreign counterparts,” according to NPR.
As I reported last March, the UAW’s honcho, King, gave foreign automakers including BMW, Volkswagen AG, Toyota and Nissan an offer they can't refuse: Unionize their workers or else he'll single out one automaker and put the screws to them with a boycott. Never mind that the boycott will hurt workers, consumers and the US economy.
Last year, sources close to one foreign car manufacturer told me that they thought the target would be Toyota. But that was before a tsunami set back Japanese auto manufacturing. German automakers are likely a better bet because German unions are willing to back the UAW.
“This will be the biggest campaign ever undertaken. It will involve hundreds of dealerships,” said Dennis Williams, UAW Secretary Treasurer, adding the union will ask for help from its retirees, community groups and other unions to help with the campaign, said the Royal Oak Tribune (MI).
“We will do whatever it takes,” said Williams.
Volkswagen employees about 2,000 people at its manufacturing plant in Tennessee, while Daimler employs 17,697 in the US, down from 22,476 in 2008.
“You can’t have a middle class here in the U.S. or around the world without organized labor,” said Williams.
The Tribune reported that "he UAW has 'enhanced' it relationships with unions in Germany, Japan and South Korea to help with the upcoming campaign."
In other words, King is uniting the "Workers of the World."
If they can't get what they want at the negotiating table, the UAW will now try the economic equivalent of a suicide bombing of the economy. Never mind that they already destroyed the US automakers and their employees.
But it may not be as easy as King thinks.
Central to this effort is the belief that if car companies refrain from actively opposing a UAW organizing push, workers at German-American factories will gladly join the union.
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But that belief may be off-base. Workers know that almost every job lost at U.S. car factories in the last 30 years has occurred at a unionized company, while almost every job gained has come at a non-union company. And most of the factories the UAW is targeting are in the South, which is historically hostile to unions.
"People have a different opinion in the South about unions," said Robert Plisko, a retired autoworker who helped UAW organizing efforts at German and Japanese plants in the 1970s and 1980s. "It's a lot harder now than it has ever been, and I don't see it getting any easier."
German auto executives declined to talk in detail about the UAW's push. Privately, they remain wary of the union and its confrontational past. "They view the UAW as a disaster," said a Wall Street banker who has worked extensively with the industry.
And they’d be right.
The UAW has pushed the domestic auto industry to the brink of death.
And the only way they can survive is by using the old mob tactic of firebombing a competitor. But that tactic will likely backfire, as consumers, already resentful of union and government interference in the auto industry, simply shrug their shoulders and buy Volkswagens and Daimlers anyway, perhaps not in spite of, but because of the boycott.
Consumers of the world unite.