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Management? Labor? Globalization shapes classic confrontation

BECKY GILLETTE
bgillette4@cox.net

The United Auto Workers (UAW) strike against General Motors (GM) in late September was the first nationwide strike by the union in more than 30 years, and it only lasted a couple of days. In the end, the strike may have actually helped GM by reducing inventory and the company’s obligation to pay for retiree health care. The company’s stock prices were up 9% after the strike ended.
But what kind of implications does the strike have in Mississippi, where auto manufacturing has taken hold first with Nissan’s plant in Canton and now with a $1-billion Toyota plant planned near Tupelo? The state also is home to a number of auto parts manufacturers.
“As suppliers for the automotive industry, we keep a careful watch of what happens with automotive manufacturers in regard to the production lines,” said Kevin Logan, vice president, Unipres Southeast, USA Inc. in Forest, who is also vice president of the Mississippi Automotive Manufacturers Association. “Any hours that the line is not in production causes less demand for suppliers’ products. Generally, people who supply the industry and work in assembling the automobiles want an uninterrupted workflow to produce quality products. It was good to see UAW and GM come to some terms quickly, as to not interrupt the workflow or be a detriment to business. “

Competing globally
Jay Moon, president and CEO of the Mississippi Manufacturers Association (MMA), said the strike shows the difficulty that manufacturers with unions have staying competitive in the global marketplace.
“Of course, we are a right-to-work state here and we don’t believe unions are necessary,” Moon said. “What the union wanted was guaranteed employment. That makes it extremely difficult for businesses that are market responsive to be able to control their costs and stay competitive in the global environment. If they have mandatory employment, they have to keep workers employed whether or not they have a sufficient market to absorb the product they are manufacturing.”
In going on strike, UAW said a major issue was getting an agreement from GM to continue to manufacture its vehicles in the U.S., guaranteeing future jobs for auto workers. The union said the agreement reached with GM protects jobs.
Although there have been efforts to unionize auto workers in Mississippi, those haven’t been successful. Moon said that is because the auto manufacturers here pay good wages and have excellent benefits.
“The manufacturers here provide for their workers in an extremely good way,” Moon said. “We don’t need the UAW to be here in Mississippi to be able to do what we need to do to support our employees and the state.”
Moon said because of mandatory employment, GM has hundreds of workers who report to work even when there is nothing for them to do.
“They go into these rec halls all day, and don’t do anything,” Moon said. “You can’t be competitive with that kind of operating posture. There have been scattered attempts to organize some automobile suppliers in Mississippi, and those have been resoundingly defeated by employees. So I don’t see that there is any pent up demand or any interest by Mississippi employees to organize not just in the auto areas but any area where there is any union presence in the state. Even attempts to organize have declined over the years, much less the success rate. I just don’t think that is something we are going to see here in our state.”
Many jobs in Mississippi have been lost as manufacturers have moved oversees where labor costs and taxes are lower. Moon said studies have shown rates of taxation in the U.S. are higher than in any other industrialized country in the world.
“We also have extremely costly regulatory costs, and a lot of increasing costs in the area of healthcare, insurance, commodities and energy,” Moon said. “All of those things have been going up and, in a lot of those cases, they don’t have those similar costs in other areas of the world. It is very difficult for U.S. manufacturers to remain competitive with other countries in the world. China provides direct business subsidization of the cost of businesses in their countries. The government gives huge loans to Chinese companies and then doesn’t ask for repayment. It would be nice if you could go to the bank and get a loan, and not have to pay it back. That would be a great competitive advantage, and that is what they have. Then layer on top of it these other costs, and many businesses don’t have that kind of capability to be able to absorb these kinds of costs.”
Moon said there are a host of factors that combine to produce very difficult for American manufacturers, and that would apply to Mississippi manufacturers, as well.
“You start layering on extra costs, such as what the UAW has with GM, and it makes it extremely hard to stay competitive when dealing with other companies around the world,” Moon said. “Some companies simply can’t stay open. That is why we do what we can on the state and federal level to try to keep costs on the business community and particularly manufacturers to the minimum. We don’t have control of certain costs in greater market like energy costs and commodity costs for steel, copper and aluminum. If there are ways to minimize costs imposed on businesses like taxes, that is what we try to do to at least be able to allow them to absorb other costs they don’t have any control over.”

‘Desperate times’ agreement
Joseph B. Atkins, a professor of journalism at the University of Mississippi who writes about labor issues, said the outcome of the short-lived strike is no victory for workers.
“The agreement that ended the UAW strike between GM and UAW is the kind of agreement that comes out of desperate times,” Atkins said. “The UAW wants to protect U.S. jobs, and a ‘concession’ it got from GM was a commitment to invest in its U.S. plants. GM also promised to keep paying medical benefits to current workers over the next two years. In exchange, the UAW gave up annual raises for its workers and accepted lower wages for new workers. Also, the UAW is going to take over the company’s retiree healthcare payments. Wall Street loves it. The Washington Post said the agreement was crafted to bring GM and UAW ‘out of the past century and into this one.’
But Atkins doesn’t think the agreement is healthy long term for workers or the U.S. economy.
“Do most Americans share Wall Street’s enthusiasm?” Atkins asks. “Of course, it depends on how the story is told. They’re told in the media this is the 21st century, so just accept the gradual erosion of the worker’s position in the American middle class. What’s clear here is that the only player in this game that stands up for U.S. workers is the union, and the union is doing what it can to survive.”

Workers or consumers?
Atkins, who has a book coming out next spring called “Covering for the Bosses, Labor and the Southern Press,” says the continuing drain of good, higher paying manufacturing jobs out of the country should be a concern to the general public. However, he says the national press has primarily talked less about what this means for workers and more about what it means for consumers. Atkins said union members are making concession after concession each year while seeing more and more jobs lost to foreign competition.
“The union is trying to do what it can to stop the drain of jobs to other countries,” Atkins said. “These are American jobs for American workers. The union is doing a pretty heroic thing for American workers in general. I just think somebody out there needs to take a stand to try to prevent a continued drain of good paying manufacturing jobs away from this country.”
Atkins said unions don’t like to strike, and that is why this is the first time for a nationwide strike for this union in nearly 30 years.
“It is tough on everybody,” he said. “GM is already facing tough competition from Toyota and others. And UAW has been experiencing a decline in membership like other unions for a number of years. Strikes are always an act of desperation and times are perhaps more desperate now than they have been in a long time.”
In the short term, the strike could benefit the burgeoning auto industry in the South.
“Certainly the perception is going to be to reinforce what Mississippi and other states have to offer these automakers in that they don’t, at least for right now, face the prospect of a strike or a similar labor action,” Atkins said. “And so in the short term, this could be an advantage. In the long run, it’s not good for Mississippi or any other place in this nation to have a major important domestic industry like the auto industry to be suffering at the same time foreign-owned companies are prospering at the expenses of those companies. So the long-term view may not be as rosy as it is in the short term, and that is probably going to be very hard for people to see. I just think it is not something to go out and cheer because Detroit workers are striking and Mississippi workers are not. We want the industry to prosper and domestic autoworkers to prosper, too.”

Contact MBJ contributing writer Becky Gillette at bgillette4@cox.net.

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