AAH #692 - How'd the UAW Do It and What's Next

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your journey. Hi, everybody, thanks for joining us on Auto Line after

Hours. We've got show today, Gary. We're going to talk a lot

about what's going on in the labor movement in DATO industry in the United States and the Volkswagen situation. And we've got two people who know probably more about

labor and the Volkswagen situation than any other two people we can discover. Right,

We've got Merrick Masters, who's been on the show before from Wayne State University. Yes, Yeah, great to have you back here. Pleasure to

be here. Good to see both of you. And m Martinez from Automotive

News And yeah, Gary's right. You were feet on the ground, boots

on the ground down in Chattanooga, right, That's right. I was there

about a week before the voting to sort of get a sense for what's going on on the ground and try to really get inside this sort of revamped strategy that the UAW has. I learned a lot. Excited to share it today.

Yeah, well, let's hear what were your impressions down there? I

mean, what was the vibe? Vibe was really energetic, They were very

confident that they would win. I don't think anybody really predicted the kind of

landside that we eventually saw. But I saw a lot of workers who had

learned from their past mistakes, and I thought that was key. What do

you mean to this victory? One thing I mean, I'll tell you anecdotally,

they said in past elections in twenty fourteen and twenty nineteen, one thing they did was home visits, door knocking, which is sort of a staple of organizing drives. They talked to your co workers at their homes. Maybe

they'll invite you in for coffee. You have more time to talk. But

in twenty nineteen, I guess a lot of the workers down Chattanooga did not like that, and that was sort of a pitfall that they avoided this time around. They said, Okay, they got angry with us before, we're

going to avoid that this time. We're just going to hand out our cards

talk to them on our brakes. So that's one thing they avoided. Another

thing that was different was VW's stance itself, and I think this was another big key. They committed to remaining neutral. That was not the case in

twenty nineteen. They hosted the Republican governor Bill Lee, who gave sort of

an anti union message. They had a lot of captive audience meetings with their

workforce. They didn't do any of that this time. In fact, I

took a tour of the plant and again about a week before the election.

You saw monitors in the main hallway that workers come through every day to go to their lockers and get ready for their shifts. And the monitors said,

you know, reminding them there is an election, and there were slogans like we're VW and we vote or vote for the workplace that you want, and it encouraged them to vote and told them even if they had signed a support card that still didn't count as a vote. They still needed to vote.

So they weren't leaning one way or the other. They were still telling them

there was a vote. They were being opened about it, and they weren't

as antagonistic or as openly hostile as they were the time before. Marek,

you got to see this as a historic shift in the unionization of the first transplant to get unionized. Well, as you said it, it's a classic

lesson in organizational learning. The UAW learned something and under Sean Fain's leadership,

they listen, and so they listened to the workers there. And when they

tell you that they don't want them to come to their house, they don't want to publicize that UAW people are coming around talking to them. They would

prefer to operate more within their own networks, disseminate the information themselves, and also rely more on social media. And so the UAW took the approach that

rather than helicoptering in and trying to organize and saying we'll show you how to organize a plant, they said, tell us what we need to do to get organized. One of the things I think was very interesting about this,

which may foretell something very positive and Mercedes, is the UAW was successful in translating its authorization cards signatures into votes. There wasn't a gap. Now,

part of that was due to the proximity between the petition and the election.

There wasn't much time, and the same thing is true with what's going on in Mercedes. But they went in with over seventy percent, got seventy three

percent of the vote and not quite one hundred percent turnout, but a very high turnout, and then they may be in a position to replicate that advance.

That's why I wouldn't be surprised if they won substantially there as well.

So do you see this being Sean Fayn's approach. I mean, because the

UW has been trying to organize a number of clients for decades. It's his

approach and the people around him. He has a whole new group of people

around him that are much more attuned, much more media digital savvy, and are willing to listen and have been out on the ground more have a better connection to the new generation of workers. And it's important to remember since twenty

fourteen, there's probably been a lot of turnover in that plant, even since twenty nineteen, and they're good at listening and getting a sense of what people want, and they're also exporting the more favorable environment more generally. It's just

for both of you. This is something that I don't understand. On January

eighteenth of this year, Volkswagen Group of America put out a press release which opens Volkswagen Group of America Today announced that the Top Employers Institute has certified it as a Top employer for twenty twenty four It goes on to say Volkswagen's focus on employee will being goes well beyond traditional benefits. The company offers a range

of initiatives and designed to enhance play experience. Blah blah blah blah blah.

So this is a third time in a row that they've won this award for being presumably a place that cares about its people. How did this happen?

Well, you know, I'll tell you it's interesting. The workers I spoke

with down there said, you know, we're noticing as we get closer and closer to this selection, or as more and more people sign these cards, BW is really reminding us about all these strange benefits that we don't even realize we have. They're doing a very good job talking themselves up and pretending to

be better than how we feel they actually are. But to that point,

Gary, I think BW has traditionally offered good wages and good benefits. Maybe

not as great as the Detroit three and the unionized factories though, And what the workers told me is, you know, we have it pretty good now.

It could be better, but the main thing that we want. We

don't care how good of an employer they claim to be, or how good of an employer, they in fact are we just want more security because we don't have a contract with them. So if they're a great employer today,

they could turn around and change that tomorrow. They don't necessarily have to offer

us the same things they're doing today. So there's just this era of uncertainty

around a lot of what they were getting. Now that's not to say that

Volkswagen would do that or would suddenly start to abuse them, but the workers said they just wanted more security and that sort of reassurance that a contract in black and white would actually provide. I would say that there's often a disconnect

between these so called surveys of employee satisfaction and how they determine who are the top ranked employers in terms of employment setting, and the reality if you connect with the workers, they're going to look at who is their plant management, and plant management will as was noted, they will get savvy about management when you get close to an election, and the workers are smart enough to know that that they're doing a lot of this. The eleven percent raise that they

adopted after the heels of the contract, that was all done in response to the uaw's push and a lot of what occurs in terms of messaging and trying to maybe assuage concerns will will be done in response to a union organizing effort.

The workers know that what they also will be looking at is how much do they trust this top management when they see management behaving very macurely like that.

What they can give they can take away. It's how they treat them

day in and day out. How do they treat them in terms of scheduling,

how do they treat them in terms of handling their shifts in issues that come up on a regular basis where they depend on good supervisory employee relations.

You don't know much about that connection, and that's a central one in terms of organizing on the ground. And I would also say there's another factor in

here that you know, Volkswagen Group is very much an international company, and they may have concerns about the real leadership of the company and how much the local decisions are actually influenced by those that are made far away, and they may not have such a good feeling about their more distant leadership. I don't

know if it's still true, but it has been true that the Chattanooga plant was the only Volkswagen plan in the world that did not have some sort of union or works council representation. Could it be that the as you guys know,

the supervisory board of Volkswagen or any German company has to be made up of half of it has to be labor representation. Could it be that the

people in Germany are like, hey, you know, what the heck?

You know, this is the only plant that doesn't have any representation. You

know, Chattanooga management, you better not be fighting this thing. I'll let

you. Yeah, I'd say. The point I would make is that from

the union the works council side overseas, they work quietly and sometimes not so quietly, pushing BW and the council overseas to yeah, recognize, you know, or stay neutral, do not interfere. Let the workers decide, because

they deserve to have representation just like we do. So I think a key

element of this was that international cooperation between the unions overseas, and you know, if you go back in Bolkswagen's history, there's the Westmoreland, Pennsylvania plants that was unionized because when VW opened up I believe it was the seventies, right, they saw everybody else, all the other plants in the United States had unions and all their other facilities were unionized, so they just sort of took it as a matter of inevitability. So I think it was just card

check recognition. They said, okay, yeah, well card check, sure,

we well unionize everywhere else is right. So in its history Bolkswagen has

been opened to unionization. Well, they operate under a different model. The

European German model is different from the US model. It is more of a

partnership model in which labor participates and management through various boards. In the US

the model has been collected bargaining, which is a more adversarial approach in which the parties remain institutionally separate. Labor is not part of management. Its view

has always been a if we become part of management in any co deterministic way, we will be the junior partners in success and the senior partners in failure.

And they want to preserve their independence, their autonomy. There isn't a

view here that we're part of a if you will a UNI party, that we believe that workers' interests are the same as management centrists and therefore we shouldn't have any clash. I think it's a much more ad It's more like a

courtroom setting if you go in there and advocate your case. And I think

they want to maintain that independence and that autonomy, And I would go to a point that I think has really been overlooked in terms of Sean Fain's position when he says the UAW was too cozy with management party means because of those joint training centers, which the source of so much difficulties. Those were financed

by the companies and administered jointly by the union and the companies, and they became quasi social welfare organizations that funded a lot of projects that the leadership of the union and or the management wanted funded had nothing to do with training per se. You know, when you're building baseball stadiums in Detroit from these funds,

that's a much different task than training workers on the new technologies that you need in order to be productive in the workplace in Americas. You know,

they raised so much money, they had to find ways to spend it.

Well. It was a formula driven thing. When it was one of the

former executives that General Motors told me at one time he oversaw part of the fund we said at one time they had seven hundred and fifty million dollars in that fund. Yeah, I mean that's a lot of fun. So let's

explain this fund though, so the viewers who are not deep into the UAW Big three relationship. So this was established because in the nineteen eighties to make

the companies more productive, and they thought that a joint training program between the workers and the union would enable them to have money to fund management and labor jointly on new techniques, new forms of management and lean management, those kinds of roboties and new technology coming to new technologies and those kinds of things.

It was funded. They were established via the collective bargaining agreements and established by

formula. They were sort of nicknamed the Nickel Fund, and there was a

certain percentage of money set aside that for every hour work it would go into this joint train to start out as a nickel yeah, the hour you know fund. And so that's what they did, and it built up depending upon

the number of hours you had working. And the companies had discrete and over

how to spend this money with the union. They were jointly managed with their

own boards. They had people that were officers of the union and representatives of

the HR departments of the companies running these things. At General Motors and I

think at Ford they did a much better job in auditing and making certain that these things were well done. They were more lax at FCA at Chrysler,

and it led to some abuses that proliferated and to the really the embezzlement of several million dollars by mainly union officials, but to some extent of Chrysler executives.

And so that was it was spent on a variety of purposes. Originally

tended for training, but then they spent money on a variety of other things, and they gave money also from these training centers to the charities that were supported by the union leaders. So it started out as being a very noble

thing, started out as being something that would be very useful in a technologically changing industry, and yet it well and also the UAW. What the UAW

did with them was to say, okay, we'll assign some of our people to these joint training centers, but you're going to have to pay for them out of the joint training center funds, which are company company funds, and you're also going to have to pay an administrative fee to US, which was essentially a profit to them of seven percent. And that's where they got into

some difficulties because they were finding that they were subsidizing people who weren't doing anything.

My understanding too, was that per the contract, all that money had to be spent by the end of the contract. It could not accumulate and

get rolled over, and so they would come to the close to the end to the contract and have gobs of money left over. And if you'll remember

in twenty nineteen, Ford had so much money and they were scrambling figuring out ways of how to spend it. They decided give everybody a free computer and

free internet access. And then they decided, we'll ever given the UAW people

all the free stuff, we got to give everybody else the free stuff too.

And yeah, I mean that's how much money was in the fund.

And then GM they built what I call the taj Mahal of a training center down on the Detroit River. I mean, the money that went into that

built we had a pretty big one at Ford too, and so they, I mean they and I might say parenthetically on that there was a lot of swag that was contracted by these joint training centers for the UAW workers that were tend these training programs, which might be you know, they would contract with somebody who would produce the jackets the other accessories that they wanted to distribute to

rank and file, And some of the vendors were really doing this and overcharging and pocketing the money and then kicking it back to union leaders. That was

more prevalent at GM. So, Mike, you mentioned the governor of Tennessee

and what was it a week or two before the election, the governors of Alabama, Georgia, Mississippi, South Carolina, Tennessee, and Texas came out with a letter saying, we are concerned about the unionization campaign, driven by misinformation and scare tactics at the UAW, has brought into our states. As

governors, we have a responsibility to our constituents to speak up when we see special interests looking to come into our state and threaten our jobs and the values we live by. And it goes on from there and it says unionization would

certainly put our state's jobs in jeopardy. In fact, this year, already

all of the UAW automakers have announced layoffs. Ye. So two questions to

you, guys, how does that resonate with people who are not in the auto industry and be what is the legitimacy of their claim? Well, I'd

say they have a point if we're talking about things that have changed or not change between past organizing drives. In this one, this is something that hasn't

changed. It's the political establishment in some of these southern states pushing back against

unionization. And they tend to make the same points as they have been for

years, and that's one of them, is that if an automaker unionizes, their labor costs are probably going to go up substantially. And if their costs

go up, would they be as willing to invest in the future in this state or would they pick another state, possibly even another country. And it's

the same argument you hear even from the automakers for GM and Stilantis during contract negotiations every four years. We heard it last fall. I think there's some

truth to that, right. It's basic business. If your costs are going

to go up as a company, as an organization, you want to look for the lowest cost opportunities to build a vehicle. The workers will say that

that's a scare tactic, right, So you're using this term on both sides here. But the governors, you know, they're pointing to these layoffs.

I think it's a little more nuanced than that. You sort of have to

take them on a case by case basis, although the argument could be made that I believe in the case of Stalantis, there are some supplemental workers they're laying off. These past UAW contracts dramatically raise the pay rate for temporary supplemental

workers. So if you're Stillantis, maybe you don't use as many and you

just rely more on your permanent, full time employees. So there's a case

to be made the workers. The pro union supporters would argue that the governors

are taking this a little too far, but you can't really ignore some of the economics and some of the things that are happening in Detroit. Well,

I would say the governors are reflecting the sentiment of employers and other major donors to both sets of parties. One thing I can say about American business in

general, and those I would include in that a mix of foreign companies that invest in the United States, is that when they invest here, regardless of their workplace relations in their country of origin. They want to maintain a union

free environment. I don't care how liberal they are in terms of other issues.

When it comes to unions, you can count on companies being anti union and they're playing into that. What I thought was interesting, as Mike said,

was that you didn't see as much of that in the Chattanoo campaign.

You saw a lot of it in twenty fourteen, twenty nineteen, much more mobilized on the ground. And I would expect that what this election is chat

who has done, and it will be only amplified if they win advance in Alabama at Mercedes, is that you will see these anti union forces become much more aggressive in terms of what they do on the ground and mobilizing at the grassroots level among the work sites themselves, the surrounding communities, and the lawmakers.

Georgia I think is interesting just passed the law that the governor signed, and this is a Republican governor, although he's not President Trump's favorite governor, I might say camp, but I should say that he signed a law which said that you cannot continue to get the incentives of the state that they invested they gave to companies for investing in the auto industry there you will relinquish those if you voluntarily recognize the union. So I think that one thing that's interesting

is that Volkswagen never voluntarily recognized the union. It could always do that.

And I think what the UAW has done in Volkswagen and Mersy by filing unfair labor practice charges and the other companies as well, set the stage that if they don't win the election, they're going to ask for the National Labor Relations Board issue a mandatory bargaining order and say you have to bargain with them because you interfere with the election and there's no point in having another election. Wow.

If I could make a point though, talking about the opposition, I would agree, you know, maybe not as organized and as forceful as it has been in past elections. But I'd also say maybe some of their arguments

aren't as residant anymore. From what I saw when I went down there,

there were a whole lot of anti union yard signs and they just sprouted up the couple days before I arrived, a week before the election, and the yard times sort of fell into a few categories. There were one trying to

attach the UAW, two Democrats, UAW equals Biden, say no to Sleepy Joe. Those were a few of the slogans. Another one was remember west

Moreland that plant eventually closed. The opposition was trying to insinuate that it was

because of the union that it closed, which historically I'm not sure that that's the strongest argument. The other key part of their argument is that the union

is or was corrupt, and that's something they can't really hit them on anymore because of the fact that you have Sean Fain and a whole new slate of leaders who were democratically elected. You do have a federal monitor overseeing things,

and you have these sort of checks and balances in place, so you don't have the disaster and the embezzlement that stemmed from the training centers and from the disgraced former presidents that were sent to prison. So a big piece of the

opposition's argument against unionization is sort of null and void these days. And on

the other side, you have a union that's really racking up a lot of wins that they couldn't point to before, and now they have something tangible in the form of the Detroit Three contracts to show the workers down South, Hey, you want cost of living reinstated? You want a twenty five percent raise?

Eleven is pretty good, but why not twenty five over four or five years? Right? How about profit sharing bonus? That's something Moolkswagen workers don't

have. So the union can now point to things to say they only got

that because of us. You can get it too, you know. I

love the point that you're making here America is that we'll probably see stronger anti union forces. These Republican governors must be horrified. I mean they took a

very strong stance, as Gary just read the statement there, and they lost resoundingly. This is a presidential election year. I mean there's a lot at

stake. What do you think might happen in Alabama at the Mercedes Plan?

Well, the governor there is very vocal in her opposition and has issued statements earlier to the effect that we don't want the unions and the I think this joint statement was issued from her office, I believe, and I think Mike Race is a really point and there's a there's a nuance and a subtlety to this which shouldn't be overlooked, and that is historically the Republican Party which used

to have a liberal faction under Rockefeller in Romney, but that dissipated in the nineteen eighties under Reagan and it became much more of a quasi libertarian party.

And I think that you know, get business, get government off the back of business, tax breaks, et cetera. In anti union, you saw

after the election of twenty ten, when the Tea Party really caused the change in the makeup of the Congress and state legislatures, that they went after the unions across the public sector and in the private sector as well. The Trump

movement is more of a populous movement and they are not as viscerally anti union.

They will go after the union leadership and want appeal directly to the union members. So Trump, I don't think he would issue a statement like this,

like sort of like Nicky Haley did, and she she could be called almost the governor of Boeing, and you know, she was vocal about being opposed. We don't need the UAW, we don't need the machinisty here or

all those kinds of things. But this they want to get workers that are

unionized to vote for them, and so they're going to appeal to the working class, and their appeal to the working class is going to be exactly what Trump did when he came in here, when Biden appeared the same week on the picket lines, and Trump came in a day or two later in Michigan and Michigan and came in and talked to the non union auto supplier and said, the UAW workers deserve a pay raise, But I hate to tell them that their strike doesn't matter because all these jobs are going to go China because

of the eb policy and mandates of this administration. The Chinese are going to

be able to import a lot of lower cost evs and take over the international market. And that's sort of what Elon Musk has assinuated continuously that he expects

it. Maybe in the next few years, nine of the ten largest sever

companies in the world will be Chinese. So let's let me read a quote

here from Joe Biden. After the vote was successful for the union, Biden

said in Part six, Republican governors wrote a letter attempting to influence workers' votes by falsely claiming that a successful vote which jeopardized jobs in their states. Let

me be clear to the Republican governors that tried to undermine this vote. There

is nothing to fear from American workers using their voice and their legal right to form a union if they so choose. In fact, the growing strength of

unions over the last year has gone hand in hand with the record small businesses and job growth along the alongside the longest stretch of low unemployment in more than fifty years. I will continue to stand with American workers and stand against Republicans'

efforts to weaken workers' voices. So how is that going to plan in p

AIA. Yeah, I mean, well, you talk about popular sentiment,

right, he's appealing directly to workers as well. But I think the again,

the issue is, you know, if you're a company, you may have no choice, you know, if your costs are going up significantly.

One thing Volkswagen point out to me when I took that tour and they were trying to tell me how great they were to work for. One thing they

said is that in Chattanooga they haven't had any permanent layoffs. They haven't laid

anybody off, even through the Great or in the immediate aftermath of the Great Recession when the plant opened. So, you know, will that change?

I think it'd be premature to speculator suggest and could you blame it all on the union if it does change. I'm not sure, but you know,

there's this feeling that you know, as long as the workers have some protections through a union, that maybe things might be okay for them. So,

but I think the Mercedes plant that'll be an interesting test. We talk about

how historic this was for VW, A decade in the making. Honestly,

really now comes the hard part, right, this was maybe the lowest hanging fruit for the union. Doesn't Mercedes pay profit sharing? I seem to remember

hearing at some point that they were getting like five thousand dollars in profit sharing at the Vance plant. They may very well get a profit sharing plan.

I haven't checked that out to determine, but that's a good point. You

know, what exactly benefits do they have? Are perks that go into their

compensation package. All those things will be considerations. But I think it's interesting

that seventy percent of the workers they're signed an authorization card, and if you're doing that in Vance, Alabama, that's a pretty statement. I think that

you know that an election is right around the corner, and the National Right to Work Committee has been pretty vocal. It wasn't Chattanooga, and I'm certain

to some extent in advance, it's gotten the word out that if you sign an authorization card, you are guaranteeing that election will take place, and you need to be careful about doing that because the National Relations Board is going to be very, very insistent on having an election. They've got expedited in LRB

procedures now to hold an election sooner after the filing of the petition. All

those things are going to work, I think to the advantage of the union.

I want to go back to what you said about Joe Biden. If

you look at polls, polls will tell you that Biden's performance on the economy rates pretty low. And if you look at real wages, they have gone

down under Biden's administration, and even the UAW pointed that out as part of its effort to raise wages its new contract, although it didn't mention Biden by name. And I know that the union leadership Lockstock and Barrel say that they

support unions, but I've never considered I was a Biden supporter of nineteen eighty seven. That's how old I am, and his presidential campaign didn't last very

long, and I saw him again in nineteen ninety one when he came into Pennsylvania campaign for Harris Walford. I remember at a meeting with us, a

small group of people. He talked about how important it was to work across

the island, talked about his good relationship and how he drank bourbon and branchwater with sender James Easton Mississippi segregationists. And when I've heard stories recently, you

know, he's always talking about having lunch. You can get lunch. When

he talks about being the most pro union president in American history, his record now is not necessarily stack up that well. I wouldn't compare him to to

Teddy Kennedy or Hubert Humphrey or anything of that nature. I think he plays

well to the audience. But at you rate is an interesting point. What's

the argument going to be to get working class people to vote for you.

He's made his appeal. You know, I stand on the picket lines.

I've formed this organizing empowerment thing. But union membership continued to decline as a

percentage of the workforce, and wages have continued with inflation upticking recently, real wages have gone down started to go down again after rising a little bit in the past year. So I think people are going to say we're very uncertain

in the transition to EVS about what this industry is going to look like, what the profitability of the companies are going to be, and what our jobs are going to be. And these non union companies are going to say we

invested here in non union facilities without having the expectation of it. We have

a UAW workforce, and if they do have a UAW workforce, we may have to rethink our footprint. As Jim Pearley said, look, we got

to take a quick commercial break. I want to get back. When we

come back from that, I want to talk to you guys about the tactics that the union is using. But first a shout out to our sponsor,

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your morning machiato, that's what really matters, Bridgetone toronzo Evy tires less noise for more quiet comfort. All Right, we're back talking. As I said,

I want to ask you guys about union tactics. Marrik he raised the

point that you know there's been this super majority of signing the card check.

But we've seen that happen in the past. Maybe not quite a super majority,

but a clear majority of workers, including at Chattanooga the last time around, signed a card that yep, they wanted a union, but when a time to go into a vote in a secret ballot, they did not vote in favor of the union. What changed this time, well, I can

tell you in the case of Volkswagen down in Chattanooga, they were cognizant that an authorization card signature doesn't equal a yes vote in an election. So instead

of solely relying on the cards, they tried to build a network of support from within the plant, every shift, every line, every department, And instead of having as in the past, they sort of had an organizing committee of about I think ten to fifteen percent of the overall plant workforce. That

was what they shot for. This time. They had I think a couple

hundred workers I don't know what that translates two percentage wise on the organizing committee.

But then they sort of tried to deputize other people. They called them

I believe election captains or leaders something to that effect. Again, every line,

every department, and those leaders would be in charge of, you know, getting the word out to between ten or twenty people next to them on the assembly line in their department. So there was this really conscious effort to

have the network of support and at least be able to reach every single person in the plant. And by getting to that seventy percent, they knew,

okay, even if a few people drop off, we have enough to be you know, fifty percent plus one, which is all we need in an election. And Samy pointed out they did even better. They got seventy three

percent of the overall vote there. I would say Mike is right on target

with that. That. In fact, they listed those members on their website

at Chattanooga and it's close to two hundred people, a very impressive list.

And what they're doing as a strategy or in legislative politics, you call it whipping the vote. And so you get people to say I'm with you,

Well, that's fine, but we're going to hold you to your word.

Now they may not put it that way, but they'll say we're going to make certain that you know when the vote's taking place, if you need any help, we want to make certain. And then you have people captain sort

of watching the vote and making certain the people get out, and so they were able to translate that in And the closer the election is to the time period they filed the petition, the less time the employer has to come in through legal devices and other things to change the equation. So as long as

they can keep that time period relatively proximate, I think they will have they'll be ready to do whatever they can. This is grassroots politics one oh one

that they're practicing, and that I think is part of as opposed to the helicopter, the top down the heavy handed approach that the UAW had in the past in which you talk to a lot of UAW members they hated the international or UAW as much as they hated the companies. Have no love loss there.

Another change that I see is in prior election or unionization drives, particularly at Nissan, the UAW tried to make it all about social justice, particularly in Mississippi, and this time it seems to be a focus on economics, we can make your life better rather than we can make the world a better place through social justice. Do you guys see that? One hundred percent?

And I think even in prior Volkswagen drives. They tried to use the idea

of joining a works council, just like every other plan, so maybe more nebulous concepts that the average rank and file worker didn't quite get. But if

you're talking about, you know, a twenty five percent raise versus an eleven percent raise, if you're talking about actual money, actual stability, that's something they can really relate to. And that's something you know. I talked with

workers at Mercedes as well, and that's resonating with them. And if you

look back in the union's organizing history at Mercedes, they didn't even get to a vote before advance. They couldn't even get enough support to call for an

election. And the fact that they have gotten to that super majority, I

think this time is pretty telling. And again it's sort of the same for

MILLISVW. It's worker led. Talked with one of the members down there,

Jeremy Kimbrel. He's been part of the past efforts. He says it's a

night and day difference. And I think a point that goes reinforces that is

when they reach the fifty percent threshold with authorization cards the union put out as they've done really well lately on social media a video on Facebook, Twitter, et cetera. And it was Jeremy Kimbrel standing behind a podium with his fellow

co workers behind him. It was not Sean Fain, and we all know

Sean Fain loves a camera, he loves doing that. But instead they let

the workers actually lead this announcement and lead this organizing drive. So basically,

does it come down to vote yes if you like money, vote no if you don't like money, money, security, just stability. I think for

the future, that's what I had heard. I think it's having a voice

in these things that you otherwise do not have and not being at the whim of management. If you don't have a union representing you, you can be

concerned about social justice, but workers are not going to be concerned about that in some sort of an abstract way. They're going to be very concerned about

what that means to them at the work site. And that means to them,

well, they do they have what they consider to be a just wage, and for temporary workers, you know that they got one hundred and sixty eight percent wage increase at Stilantis. I think you know that's that's a big

move towards social justice in their mind. But also another thing is going to

be how are they treated in terms of the assignment of these work schedules and working hours and all kinds of other things. They're going to be watching that,

and if they have a mechanism for grieving that that's a check on management whim, so to speak. So they're going to look at this as being

part of you know, the UAWS said, you tell us what you want.

You know. I think this is sometimes people can get mad at John

Fain and blame him when he came out and said I want retiree healthcare restored, and I want the defined benefit plans restored. But when he also issued

his demands, he said, these are the members' demands. These are not

the presidential demands as they were previously called. That's what the workers told him

they wanted. And that didn't mean that he was going to go in there

and argue for everything with equal vigor. But he knew they wanted a big

pay raise, that's part of social and economic justice, and they wanted other things. And to push the conversation as far as he could, including the

four day work which has since got a lot more of attention than it has heretofore. But I think he listened and said, we'll act on what you

want. You tell us what you want, and we'll push those issues and

we'll tell you what we are able to do. And it's it's important to

remember that a large portion of the workers in the South at these sites are minority workers, and they don't like to be patronized. You know. They

don't want people coming and say, oh, it's all about social justice, but no, it's how much you're going to raise my pay, how much you're going to protect my job. That's real justice to me. And if

you're not going to do those things and talking about all of these other things doesn't matter. Guys. I can give you a quick, perfect example.

I talked with Isaac Meadows down at VW. He's been there for about fourteen

months. He works. He starts to put parts on vehicle bodies as soon

as they come out of the paint shop. He told me a very sort

of mundane example, but he said there was one day on his shift where there was some issue with production, so it was sort of held up and they extended their first break time I believe by like a half hour forty minutes something like that, but then to catch up later on they shortened their second break time down to five or ten minutes. And that was an example.

He said, I don't want my employer just to be able to change my shift patterns, change my break times, willy nilly. I want to have

it in writing and be able to take my breaks when I'm supposed to take my breaks. So there's one example, no good example. Do you guys

think that there will be a difference when the union goes after Toyota and Honda?

And I only ask that because my perception is they've done a terrific job of working with their employees, getting them engaged in things, treating them very well. That's my perception. But I'd love to get your thoughts of the

success the union might have against particularly Toyota and Honda, not necessarily the other Japanese versus what we've seen with Volkswagen and maybe even Mercedes. Well, one

thing, when I hear that, I appreciate it, and I appreciate the effort of part of management to treat its employees as well, but that can be viewed as paternalism that they go in and Japanese culture is very paternalistic.

You go in there and you say, we're going to give you what you want, and everybody operates as a team, and we collaborate and we like to play good with each other in the sandbox. That's nice. But when

push comes to shove and you have to make a decision, what voice do I have in it? And I think that's the question that the union is

going to be pushing them to ask, because otherwise you're really at the mercy of what they decide. You're not going to have any influence over where they

locate product, what they locate here. They can take away what they do

in terms of, you know, any kinds of benefits they give you, any kinds of accommodations they give you, and work scheduling whatever. You know.

A manager at that point in time could have decided, well, we're you know, we're going to give you an extra half an hour at the end of the day. But that's my choice. I may not do it

next time. And if my senior management comes in and says, don't you

dare do that again, We've got to get this product out, then he or she is not going to do that again. I think that's the viewpoint

that they're going to have. And I sometimes think when we look at how

well people treat employees. Now, I know a lot of managers that think

they treat their employees very well, and then you go talk to the employees and they say, I don't know what or she is talking about, but you don't have that feme that same fing So, you know, Mike mentioned Jim Farley's point about, you know, we'll have to reconsider our footprint in the United States in the future. So I mean, what is going to

prevent Ford from saying, Okay, when we make product X, we're not going to be making it here, We're going to make it somewhere else.

You know, to your point about whether Toyota or Honda or Nissan or whomever would basically say, yeah, you know what we want to do it here, will do it elsewhere. Well, I mean that's a management prerogative.

You can negotiate to some extent, as they do in the auto industry over where product is located and produced, the extent to which you can push that to a strike, I mean, that's part of management prerogative. So I

think that the auto companies are probably being generous and negotiating those things so much with the United Auto Workers. But I would say that you really have to

be cognizant of the fact that this is a management decision, and that only if you are able to have some sort of influence one way or the other over management decisions. And that becomes very hard if you're part of a board

and have to go along with board decisions and those kinds of things. But

if you are part of an opposition force, if you will and can raise the cost to management of doing the same thing. I think it's interesting because

when I Ford always at the beginning talked about we treat our workers well, and we spend a billion dollars more on our workers, and we're very proud to do it, and we have more workers in the United States than any other the other companies. And then at the end of this negotiation, what

you hear is that we didn't particularly like the way we're treated by the UAW.

They went out on strike. They didn't give us any brownie points for

all the good things that we've done in the past, and therefore we're going to look at our footprint. What I would say though, that we also

need to keep in mind with you know, whether you call it a threat or whatever what Farley said there about a week I think the ink was still drying on these contracts. About a week after the strike ended and they had

signed these things, the CFOs for Ford and General Motors came out because it was quarterly earnings time, and they both said, oh, yeah, labor costs, Yeah they're going to go up, but yeah, no big deal.

We can offset it next year. We'll be fine. We just have

to find some manufacturing efficiencies here and some other cuts there, and we can fully offset the increase in labor costs. So for all the rhetoric, for

all the complaining, quite frankly on from either side, at the end of the day, yeah, if their costs did go up, they seem to just brush it off. I'll tell you. In my opinion, that was

a message to Wall Street. Okay, we went through this whole thing,

but don't you guys worry. Our stock price is going to be fine,

Our earnings are going to be great. Sure. Meanwhile, we just saw

GM and Ford's earnings come out this week. GM is doing less than a

seven percent profit margin, Fords at a three percent profit margin. That's not

sustainable in an industry as competitive as what we're seeing right now with this very tentative switch over to EVS, tens of billions having been invested, there's earning zero return. The Chinese breathing down their neck. So when the CFOs go

man, don't worry about it. You know, we'll adjust. That's a

Wall Street message. I think that you raised an interesting point, and it's

why sometimes the parties don't trust each other, and you have you know, right at the end of the contract. Up to that contract, they were

pleading, we can't give anymore. We've reached the limit. This is the

absolute limit. And then next week they'd say this is the absolute limit,

and Sean Fain said, I don't believe you. He called their bluff,

and so they don't believe them. It often depends on who you're talking to,

whether you're talking to your shareholders, whether you're talking to suppliers or or the workers or the politicians. But I think you raised an interesting point here

that the companies bet their house on Ford and GM on EBS, and they knew and the workers knew that they were not going to be as profitable in that transition. It just wasn't the cards and so therefore their choice was do

we get as much as we can now or maybe hold off on some other things and hope that we can get a little bit later. And I don't

think they were willing to take that risk because they knew that the future is very uncertain. Get what you can now and then hope for the best,

because it's going to be very difficult to remain viable in this competitive environment.

Absolutely, and that's why I raised at the time last year the specter of winning the battle and losing the war on the part of the Union. This

industry is undergoing change like it's never seen before. I can easily paint a

picture where GM and four don't exist by twenty forty. So you know,

and look, I'm not saying that the Union shouldn't be asking for what it did. It should, absolutely, but having a strategy that was designed to

financially hurt them too, and it costs them dearly. You know, the

shutdown at the Michigan truck plant, I mean that really hurt. You know,

they ran out a Ranger that Ford sold zero Ranger pickups in February.

That's how much that that launch was disrupted. And so you know, the

cost of wages and benefits is one thing. But the strikes and some of

the other burden that you get with having a union, especially in terms of work rules and lines of demarcation. I think that's a problem. That's what

really these non union companies fear more than the wages and pure compensation. It's

these extra things that make the cost of doing business so difficult. You don't

have the degrees of freedom, you don't have the flexibility, it's harder to make change in the workforce, and you're dealing with competing institutions and competing loyalties.

So anytime you have a union representing the workers, there that is an dependent third party, and your workers, when they act as representatives of the union and dealing with management, become protected their actions. So you can't just

go A worker can come into your office representing the union and argue a point, and you can't really say, well, you're in subordinate and get out of here. We're going to fire you. Well you have a grievance.

You may be able to do it and get away with it, but it could be an illegal act. Nonetheless, Yeah, I mean I think it

it's hard choices for Walter Ruther I think recognize that you're threading a very thin needle all the time in auto and I don't know that they've arrived at the recipe. I don't know who the companies have. I mean, right now,

how many bosses do the companies really have? Who's your boss? Well?

Is it the shareholders? Yes? Is it the workers to some extent

yes, through the UAW A third party? Is a govern Well, that's

a big y s now because I think the biggest force driving the behavior of these auto companies now is the federal government. And the states that are empowered

by the federal government to adopt their own emission standards that are copied by other states totally agree. So I want to get back to this issue of Volkswagen

and what John was asking about in terms of Toyota and Honda. So last

year in the United States, Volkswagen sold three hundred and twenty nine thousand vehicles.

Last year in the United States, Ford sold seven hundred and fifty one thousand F Series trucks. Now, all of the three hundred and twenty nine

thousand vehicles that Volkswagen sold in this country were not built in Chattanooga. Good

percentage word, because there were Atlases and Atlas sports and ID fours. So

to what extent is this really a small symbolic win that you know, as we go back to the earlier thing of the you know historically have been trying.

Germany is embracing of a different type of union, but still recognizes the trade union movement. The Big Three this has been part of their fabric since

the nineteen thirties. But for companies like Toyota and Honda in the United States,

it's something completely different. One of you know, if one of those

tips, that's something I mean, I could see Mercedes flowing almost for the same reason. Volkswagen goes Okay, it's it's more symbolic than substantive. Do

you guys agree or disagree? Well, I would say I think the argument

the union's making, I'm not saying whether you know, if it's the right one to make or not. But what I think tehn Fane really believes is

that, you know, what they're fighting for is kind of transcends company, almost even transcends the auto industry. And it's more, you know, obviously

that working class versus management class sort of battle war, and he argues that workers, whatever the company however good they treat you. However, many products

you're building are simply fed up. And with the economic conditions, you know,

your dollar doesn't go as far anymore. And yeah, you may have

a great employer, things may be pretty good, but it's a little bit tougher when you go to the grocery store, it's a little bit harder when you go try to buy a car, and that the union is the vehicle to make things better for them. And he's hoping that argument will translate in

whatever plant you're in, even if it's Tesla, even if it's Rivian or Toyota, et cetera. And you know, we've seen that beyond the auto

industry, you know, and the fight at Amazon and Starbucks. But that's

what he's hoping. I don't know if that'll work. And you know,

you can point to the fact that things at the other plants have been pretty slow. They've only announced a few others that have even gotten to thirty percent

of authorization support cards, so it may be that they're not buying what fain sell them there. Well, I would say you raised a really interesting point

when you take a look at the let's segment, the domestic auto industry into two parts, the unionized part, in the non unionized part. In the

unionized part, you have three companies, two of which are American based.

In the thirteen or more non unionized companies, you have three American companies electric vehicle companies, and the rest are foreign based. You take a look at

Voltswagen at Chattanooga. I think I looked at the numbers for twenty twenty three.

Only one ninth of Volkswagen's production of actual units was made in North America.

And these companies, even Tesla is a global company, but these foreign based companies are really genuinely global, as is Delantis. You can't go to

them as a public official and say it's really important that you build your manufacturing and sites in the United States and protect American jobs. You can do that

with Ford and GM. It may play variously well, depending upon who's in

the leadership position and the economics of it. But what is to keep them

from saying, as you suggested, you're such a small part of the overall pie, We're not going to mess with that. If you're going to give

us even more of a headache we have, why are we going to locate any more of our facilities here, and I think that's why the governors signed this letter. That's why they're concerned that these companies won't make further investments.

And they're not foolish. They know how difficult it is dealing with an American

union and American workforce. Our workforce is much more heterogeneous, much more differentficult

to manage for a variety of different reasons. We have a very legalistic system

in a pluralist society in which you have I mean, you have workers at Google protesting over wars and you know using you know, sit ins in the offices. In some other countries you wouldn't see that. But you have a

situation which is I think pretty ripe for the loss of jobs and the exodus of the auto industry from the US. So we could end up being like

Australia in which we lose our industry. So I got to go what we're

getting down towards the end of here. But i'd love to get your guys

impression. What do you think Mary Barra, Jim Farley and Carlos Zelanga at

Stilantis are thinking right now? Are they glad that the union is making in

roads organizing the trans plants against whom they have to compete and who have a cost advantage because they're not union Or are they thinking, hah, good, this is going to level the playing field for us and it's a good thing.

Well, I'd say I don't know how happy they are, because again you go back to previous contract negotiations at least before now twenty nineteen, twenty fifteen, et cetera. And one of the key arguments the Detroit three always

make is that we cannot give you as much as you want because we have to compete against non unionized Volkswagen and Toyota, Honda, et cetera. So

Sean Fain saying we're going to take away that excuse. We're going to make

it so everybody has the same layer costs, everybody's on the same playing field.

So now in his mind he has more leverage. In his mind,

Mary Barro Jim Farley can't pinch pennies and withhold from workers significant raises in the future. But again that supposes that they'll get wins at these other places too.

I'm not sure how much just a Volkswagen plant or a Mercedes plant may tip the scales in negotiations of twenty twenty eight. It would need to be

pretty widespread. But I have to imagine to a certain extent, the CEOs

in Detroit are too heavy because they're losing one of their one of their strategies and negotiations. I think that anything that strengthens the UAW potentially is going to

have to be giving them cause for concern because what comes around goes around.

If they can be more strong in dealing with these now nominally non unit companies except for Volkswagen and the US, they can be stronger visa v the Big three, and their perspective has to be longer term, which is going to think what is this industry going to look like under transitions to EVS When the dominant companies in the world are Chinese. We know that the largest markets in

the world world, you know, you look at the top ten markets, there are five Asian countries in that market, three European countries, and two North American countries. So I'm looking at the market in Chinese market is twice

as large as our market, and I'm saying, where do I where am I going to sell cars going ahead? And if I got Chinese, you

know, in Mexico and you know, Trump has laid it on the line.

I think this will be if he is able to survive these trials and actually get on the campaign trail and get the nomination and go forward. I

think you will see in states like Michigan the transition to evs, the heavy handed role of government, and the future of manufacturing industries under this administration be one of the top issues going forward. And I don't think that's going to

cut all in. The Democratic sides favor the Democratic Party of today, and

I'm a Democrat, but Democratic Party day is not the party of Bill Clinton or you be free. It's a much different party with a much different idea.

You know, Bill Clinton said in nineteen ninety five that the era of big government is over. If you looked at the campaign materials for the Senate

Democratic Campaign Committee, they'll say we seek a bigger federal government. And probably

unless you got another burning question there, Oh no, I'm I go on all day. I know we could go on these guys. No, no,

this is this has been a great discussion, very detailed, very analytic.

I really want to appreciate or express my appreciation for the both of you coming on the show today. Thank you thank you, thank you. It's

a pleasure to see you too. Yeah, good to see I think the

first time we've met, but we've talked a lot on the phone, exactly.

He always educates me a lot likewise, And I should let everybody know I'm going to be on vacation for the next couple of shows, but Gary's going to take over and you'll see him here next week. And you know,

look, if you're you're still listening, you got through all this.

You must like this show. Please consider subscribing to our website and to our

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I'll online after Hours. Is brought to you by bridge Stone Tires Solutions for your Journey

AAH #692 - How'd the UAW Do It and What's Next

Ford Ranger

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