A More Perfect Union? (part 1)

Folks in my hometown have been battling for the past several weeks as one of our largest employers, and one of the few remaining in the traditional manufacturing sector, prepares to close its local shop.

The employer, Canada’s Magna International, purchased New Process Gear (NPG) a few years ago from the ill-fated DaimlerChrysler, and since that time, they’ve never made a profit at this plant. NPG makes parts that are used on SUVs and trucks, a hard-hit segment of the American auto market. In the old days, NPG, or simply ‘Chrysler’ in the local vernacular, was a huge deal – well over 3000 employees who were significant contributors to the local economy on the basis of their high hourly wages and annual profit-sharing checks.

Since Magna came in, the local UAW union has been challenged with trying to balance the desire to keep their members working, and the need of management to cut costs and try to earn a profit in a downturned (or at best stagnant) market. There have been losses for the membership – wage cuts, layoffs, buyouts, payments to employees willing to transfer to other locations – and apparent frustration with union leadership if recent actions are any indication. In two recent votes, the local employees have refused to renegotiate their contract with Magna – the first time by an overwhelming majority, the second by only 50 votes - and as a result the plant will close. Politicians have made overtures including allowing a foreign company to take advantage of a federal line of credit, but Magna has indicated they need more than just cash to keep the plant open. We’ll likely hear more from our elected officials as they try to delay what appears to be inevitable.

What this all means to our local economy, and more importantly our psyche, has not yet been fully defined. What has been defined is the line between those who thinks the votes against the contract were stupid and those who think the union did the only thing it could do.

On the ‘the no votes were stupid’ side, the most frequently heard comment is that making $16 an hour is significantly better than making $0 an hour, which is what will happen when the plant closes. On the ‘we had no choice’ side of the argument is the belief that even if the employees took a cut to $16 an hour, there was no guarantee the plant would stay open. I can’t speak for the folks who had to make this choice, but I do question what happens next.

Are the soon to be unemployed workers really entitled to extended benefits and additional federal help, if they sealed their own fate by a voting down a contract? How long will we continue to say that any job lost in the auto industry is due to foreign competition, when the foreign competitors are making their cars right here in America, using American workers, albeit non-union ones? Are auto workers really more special than workers in other industries who are losing their jobs in this very difficult economy? Is it time to rethink the whole union thing?

Sue