The United Auto Workers union, smarting from a recent defeat trying to organize Volkswagen AG’s factory in Tennessee, has a new target, Mercedes-Benz’s plant in Alabama.
Thus far the UAW’s strategy to organize auto plants in the southern half of the U.S. is struggling. The union also is girding for industry-wide contract talks with Detroit-based automakers this summer, perhaps providing clues as to the direction and militancy of the UAW’s new president.
The UAW has created Local #112 in Tuscaloosa and asked Daimler AG, the German parent of Mercedes-Benz, to recognize it as the bargaining agent for workers, which number about 3,500. Dieter Zetsche, Daimler’s chief executive officer, has said it’s up to workers to decide, which suggests that a vote will be held.
Dennis Williams, who was elected in June as UAW president, told the Wall Street Journal that “what happens here is important to the future of the labor movement.”
Williams, 61, has said that the UAW is intent on bridging the gap between two tiers of auto workers already in the union, older workers who earn on a higher pay scale established before the industry’s downturn, and younger workers hired afterwards at a lower pay scale. So-called “tier two” workers also get less in the way of benefits, notably no defined benefit pension.
Once the current labor contract between the UAW and Ford Motor Co. (F), General Motors Co. (GM) and the new Fiat Chrysler Automobile NV expires, the union will be able to strike for the first time since 2011. The union agreed to a no-strike pledge in return for the government’s bailout of GM and what was then Chrysler Group LLC.
Williams complained in a recent interview in the Detroit News that union workers haven’t had raises; but he also sounded conciliatory notes, saying that the union wouldn’t seek confrontation “unnecessarily.”
No doubt the UAW is mindful that since Michigan passed right-to-work legislation allowing workers to drop out of the union, it’s important to achieve tangible benefits for its members. The union recently approved a 25% increase in union dues in order to replenish its $600 million fund to be used in the event of a strike.
The UAW’s acrimonious history with employers is a big reason why VW, Daimler and other foreign automakers chose to locate in southern states, where union affiliation has been far less popular than in the north. UAW membership has risen slightly of late, but still stands at less than 400,000, compared with a peak of 1.5 million in the 1970s.
Zetsche, like his top-management counterparts at VW and other German automakers, is facing a tricky puzzle in managing a response to the UAW’s bid in Alabama. IG Metall, the German union that represents Daimler and other automakers at home, favors the UAW’s bid and is pushing for company recognition, which would obviate a vote. Union representatives serve on German automakers’ supervisory board.
Michael Brecht, an IG Metall official and Daimler vice chairman, has said it’s “unacceptable” that company workers in Alabama don’t have a union.
But Zetsche also must gauge whether Williams and the UAW of today resemble the UAW that refused to grant health-care concessions to Chrysler in 2006, contributing to Daimler’s bargain basement sale of Chrysler to a private-equity company. Zetsche had previously served as Chrysler’s chief during Daimler’s ownership.
The cliché is that a tiger can’t change its stripes. Williams must disprove that chestnut for his union’s sake as well as for GM, Ford and Fiat Chrysler.