published Monday, September 16th, 2013

Smith: UNION VOTE: UAW at VW not good for local business

By Robin Smith

The issue of union representation is front-of-mind after last week’s Volkswagen employee vote.

Let’s briefly look at the realities of the job market.

Why does a company exist? A company meets a demand and sometimes an unmet need with a service or product. Ultimately, the company that offers the most desirable product or service at the most competitive price gets the business and creates jobs.

Why does a company hire workers?

To offer a service or product that meets the demand and competes in the market, employees are hired to produce and operate at an agreed-upon wage, often with benefits.

Volkswagen was recruited to Tennessee with all sorts of sweeteners and incentives to make Chattanooga home to its only American production facility, with no concern that in an “at-will” and “right-to-work” state the United Auto Workers would successfully organize.

Yet, as of last week, the UAW was voted the advocate for local VW workers.

The Detroit News hailed the “major victory” in the labor union’s efforts to access the powerful automobile import industry and predicted future opportunities.

Labor expert and University of California-Berkeley professor, Harley Shaiken proclaimed, “It’s a major achievement on two levels. First, this really sets the stage for a Chattanooga model — a highly competitive, pro-union model that has implications for other non-union automakers in the U.S. Second, we’re seeing the introduction of a new model that is highly successful in Germany that has implications for other industries.”

The goal of the UAW is not to simply “represent” the interests of the VW workers. Creating a “new model” to camouflage the decades of failure and to apply that model in “other industries” outside of the auto industry is the UAW’s plan.

How did UAW’s “representation” destroy Detroit?

The year before the American taxpayers had to bail out General Motors and Chrysler, these two manufacturers along with the Ford Motor Company paid their workers $73.26, $75.86, and $70.51 per hour, respectively. All other American private sector manufacturing was earning $25.36 per hour during the same time.

I hear the applause from those who view the existence of business to meet the social needs of the individual – to provide generous wages, health care benefits, paid vacations and even access to childcare.

I hear gasps coming from those who either own a business or understand that businesses cannot survive in competitive markets when the cost of offering a product or service is more than the revenue that results from the sale.

Politically, organized labor unions were aggressive proponents of the Affordable Care Act, or Obamacare, now having such a dramatic, negative impact on businesses, large and small, with massive increases in health care costs and fines.

Now, these very same labor unions are the hand-picked recipients of waivers from the Obama Administration to negate the “unintended consequences” to their health insurance.

In the 2013 report, “Rich States, Poor States,” Dr. Arthur Laffer, a Nashville resident and an economic adviser to Ronald Reagan noted, “Unions tend to have a negative impact. …As the forces of globalization make business more competitive, American firms cannot survive if they are hobble by inefficient labor arrangements. … These excessive costs above a worker’s actual output erode the firm’s profits and leave it vulnerable to other non-union firms.”

I guess I’ll say what most want said: Volkswagen, we’re awfully glad you’re here. Tennessee’s worked diligently for decades to enjoy our standing and opportunity in business. The Tennessee way is succeeding … without labor unions.

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inquiringmind said...

"Obamacare, now having such a dramatic, negative impact on businesses, large and small, with massive increases in health care costs and fines." is an outright lie.

Premiums are dropping in California and other states where the program is fully implemented. Many things that the naysayers claimed as the sky falling are looking better and better with the evolving implementation of the Affordable Health Care Act - the very thing the naysayers fear the most is its sucess.

My experience with local manufacturing business shows how much they care about workers. One fellow fires people in his family's company on the spot if he even suspects they might be talking union.

"I hear gasps coming from those who either own a business or understand that businesses cannot survive in competitive markets when the cost of offering a product or service is more than the revenue that results from the sale." - So, we are supposed to prop up businesses that are not viable? If reasonable wages makes them unviable, then something is very wrong with the corporate model, not the wages. Goods cost what it costs to make plus whatever profit the business seeks to charge.

I do not think capitalism means we are supposed to walk off the street and work for free or less than it takes to survive. Costs of goods should reflect the standard of living we expect of our nation. Robin what is the minimum wage in Tennessee? $7.25/hr or $15,080/yr IF you can find a 40hr/wk job? Have you tried to live on that by your self or support your children? You would call that a "generous" wage? You would be better off selling dope adding to the cost of society but you folks cannot seem to grasp that idea.

Finally, Laffer is a laugher. Note how you slip in, "American firms cannot survive if they are hobble by inefficient labor arrangements" without quantifying what that means. "The forces of globalization that make business competitive" are low wages, requiring employees to live in company dormitories in China, and have a low national standard of living with inferior or no health care. Is that what you propose here?

Why don't we go back to the early 1900's. Please read your history books literally and carefully.

September 16, 2013 at 2:33 p.m.
charivara said...

This is just another "conservative" Republican anti union attack without any verifiable data indicating that worker unions are bad for workers. Or employers, for that matter.

"Tennessee is succeeding....without labor unions." Apparently, for Robin, success means lower wages for workers, a lower level of educational attainment, a less healthy population, and higher poverty levels compared to most union-friendly states. This is what her “strategic planning” and “business development” leads to?

Automakers have never paid their workers around $70 an hour. That is a fiction. Unions are not beyond criticism, but at least base the criticism on reality.

Workers’ productivity has doubled since 1973 but average hourly wages have gone down by 7% in real terms. The time period coincides with the conservatives' successful attacks against unions.

From neglecting to mention the fact that President Obama has also granted temporary, (ignored that too, Robin?) waivers to more than a thousand businesses, to quoting Arthur Laffer, a conjurer of failed supply side economics, to ignoring the reality that the middle class was most prosperous when union participation was at its highest, Robin once again demonstrates that conservatives live in another universe, one in which ideology trumps facts. A universe which is detrimental to the life, liberty and pursuit of happiness of working people.

September 16, 2013 at 4:27 p.m.
Facts said...

As I sit in a northeastern city on business reading this, I can promise you the UAW and organized labor unions do not assist the average worker. The company with which I met today had a very dim view of Tennessee's prospects if the UAW or any organized labor unions gain access.

September 16, 2013 at 7:57 p.m.
soakya said...

Charra, I posted the link to wackers financial statements and asked you to dispute them, its been at least a week. I also asked you to back up your statements with proof. According to your own words you either don't know what you're talking about or are a liar. which is it?

September 17, 2013 at 5:33 p.m.
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