Not a Member?  Become One Today!

New UAW President Faces Tall Order

By Allen Smith  6/9/2014
Copyright Image Permissions

Newly elected president of the United Auto Workers (UAW) Dennis Williams will face many challenges, according to management attorneys.

Williams, who previously served as secretary-treasurer of the UAW, was elected June 4, 2014, getting 3,215 votes out of the 3,270 cast.

“It’s humbling. I’m excited for our union,” Williams said. “I feel the energy, the power of our unity. I’m looking forward to the challenges we have.”

The Detroit News has credited Williams with “fixing the finances of the UAW as it emerged from its darkest days.”

Williams comes out of Chicago rather than Detroit, and he led the organizing of a Mitsubishi plant in Bloomington, Ill., the only major foreign automotive plant in the United States that’s been organized.

Where Can Union Expand?

The UAW has to expand beyond Detroit and car manufacturing, said Jay Krupin, national co-chair of the labor relations practice with BakerHostetler, in Washington, D.C. The UAW already has expanded into petroleum, college campuses and the hotel industry, and might spread into other segments of the transportation industry.

“The UAW has lost a little less than three-fourths of the membership it had in 1979—dropping from 1.5 million to just over 390,000,” noted Jimmie Stewart, an attorney with Ogletree Deakins in Greenville, S.C. “That has cost the UAW a fortune, and they have not had much success in attracting new members, particularly in their core industry—automotive.

“The rejection at Volkswagen, even when management supported the union, underscores the difficulty [Williams] faces,” he continued. “The reality is that unions in general do not have nearly as much to offer as they did decades ago.”

The loss of the union vote at Volkswagen in Chattanooga, Tenn., “does not bode well for the UAW,” agreed Paul Burmeister, an attorney with Fisher & Phillips in Chicago. He said the UAW needs “to pick up strength in the South, as that is where the manufacturing is shifting. The ability to negotiate with the Big Three will likely hinge on their ability to organize and get collective bargaining agreements in these southern plants in order to have any leverage with Detroit.”

Krupin offered a different viewpoint, based on his belief that the South is not receptive to unions. His bet for more-successful union organizing is on the Southwest, where the population is growing quickly and there is a larger immigrant workforce.

Unpopular Dues Increase

At its convention on June 3, 2014, the UAW increased dues for the union’s Strike and Defense Fund to put the union on solid footing for upcoming negotiations.

The dues increase is unpopular, according to Stewart. “There is some disaffection in the ranks about a new dues increase of 25 percent per month (reported to be about $168 per year),” he remarked. “The dues increase was pushed through without a roll call vote of the delegates to their current constitutional convention, much less a vote by the membership. Rank-and-file members lit up Facebook with criticisms of the process.”

The UAW increased dues “from two hours of pay to 2.5 hours of pay per month,” Burmeister observed. “This was done to gear up for the upcoming negotiations with the Big Three and shore up the strike fund and the operating expenses. The dues income has dropped about 40 percent since 2006.”

There are several reasons for the drop in dues income, Burmeister said: layoffs, plants being shut down, production being moved, and the use of a two-tier structure that creates a lower wage base from which to generate dues revenue.

“This is a negative feedback cycle, which creates large strategic problems for the UAW to tackle in the upcoming years,” he noted.

Negotiations with the Big Three

Negotiations with the Big Three automakers in 2015 “could be really difficult,” Stewart added. “Union members oppose the current two-tier wage system, particularly in light of record profits by some automakers, but the executives in those companies are not likely to abandon the system which has allowed them to compete better with the so-called transplant manufacturers from Japan, Korea, Germany and elsewhere. [Williams] is between a rock—his membership—and a hard place—Detroit Three companies that want to survive.”

In a two-tier system, “more-senior current employees are typically kept at a higher tier of wages and/or benefits, and new employees and sometimes those recalled from layoff status come in and stay for some time on a tier of lower wage rates,” explained David Phippen, an attorney with Constangy, Brooks & Smith in its Washington, D.C., office.

Top-tier rates at the Big Three now are in the range of $58 to $62 per hour, Stewart said. The lower tier has rates ranging from $38 to $43 per hour; these rates are more competitive than the two-tier rates with the foreign competitors.

Market Forces

Phippen added that, “Fundamentally, the union’s continual fight is largely against market economic forces in an ever more competitive global market where market information, capital and labor now flow more freely and the employer-producers can less readily be locked in by union efforts to curtail competition without resorting to political processes of one sort or another.”

And, Krupin noted, unions and employers during negotiations must “deal with the economic question of whether we’re in a true recovery.”

Right-to-Work Movement

Another challenge for Williams will be the growth of the right-to-work movement in many states, including the UAW’s home base of Michigan, Stewart said.

Right-to-work laws spread quickly in the early 1950s when 20 states enacted legislation allowing represented employees to not pay union dues and not join the union. Three other states—Louisiana, Oklahoma and Indiana—joined their ranks before Michigan became a right-to-work state in 2012.

“These laws add stress on the UAW to deliver in its new contracts or risk losing more members who choose to exercise their right to drop union membership,” Stewart remarked.

Generational Challenge

Williams may also face a challenge in selling the idea of unions to the younger generation, Phippen observed. “The newer generation of workers has grown up unaccustomed to much in the way of forced collective activity, and they are much more mobile than in the past,” he explained. “The workers likely will, on the margin, want more, not less, freedom and flexibility in their work arrangements, just as they do in their choice of music, news, entertainment, travel, et cetera. Traditionally, unions have been all about group lock-in—lack of flexibility to respond to market forces and nonindividualized, group treatment in the workplace.”

Rallying Cries

Unions like the UAW may need to turn to rallying cries other than the traditional ones of higher wages and more holidays, according to Krupin. Since state and federal legislation has improved wages, unions today may organize more effectively by rallying around pensions, health care benefits and the treatment of employees, Krupin said.

Additionally, dignity, respect and fairness may be unions’ overriding new battle cry, he noted.

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

Copyright Image Permissions


Swipe for more!