Business & Economics — VOICES for REASONVOICES for REASON

Recently, United Auto Workers leaders have been urging autoworkers in American Nissan, Volkswagen and Mercedes-Benz plants to organize with the UAW. If any of these unionization attempts is successful, then one of these facilities would become the first unionized foreign-owned automobile assembly plant in the right-to-work South.

There are many reasons why an automaker may not want its plants unionized, especially by the UAW. They may observe the history of GM’s struggles with the UAW, seeing how the UAW organized crippling strikes that shut down operations for over a month. They might see how the UAW managed to obtain costly benefits that GM could not afford to pay, such as a “jobs bank” that paid employees not to work, and rules that allowed workers to retire with full pensions in their 50s. They might also see how the UAW obtained 2,000-page “bargaining agreements,” which imposed numerous counterproductive work rules that made it cumbersome for simple and time-sensitive tasks to be completed in a timely manner. For example, work rules required employees to summon a senior electrician and a senior motor repairman to be present for a simple motor repair job that any junior employee could perform.

Nevertheless, even if Volkswagen, Nissan, or Mercedes-Benz wants to ward off UAW representation, they are legally forbidden from doing so. The Wagner Act deems it to be an “unfair labor practice” for businessmen to discourage employees from unionizing. The Wagner Act also mandates that if the union can collect enough employee signatures, an election must be held to decide whether that union will represent the workforce, regardless of the wishes of the employer. If the union wins a majority in the election, then the Act forces the employer to recognize the union as the exclusive bargaining agent of all employees in the bargaining unit. The Wagner Act also forces employers to negotiate with unions “in good faith” once employees are unionized. I have previously blogged about how this forced arrangement can gradually lead to more and more costly and unreasonable burdens.

Hence, no matter how much any of these automakers may prefer not to have their U.S. factories unionized, labor laws make them sitting ducks at the mercy of organized labor. They are legally forbidden from doing anything to prevent unionization and instead can be pulled into a forced courtship, followed by a forced marriage, followed by many rounds of forced marriage counseling where unions can repeat the tactics that weighed down GM. Meanwhile, as my colleague Tom Bowden has pointed out elsewhere, non-unionized competitors can nimbly adapt the latest technologies and processes without being bogged down by labor disputes over every innovation that could potentially eliminate jobs that are no longer economical.

Why can’t we move to a system in which business and labor relationships are completely voluntary? One in which businessmen are free to decide for themselves whether it is good for business to work with certain unions, including the freedom to work with union leaders who raise reasonable concerns while refusing to deal with those who make unreasonable demands?

Image: 4028mdk09 at Wikimedia Commons