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Thursday
Dec202012

Michigan's Right-To-Work Law Already Attracts Union Jobs

Contributed by Chriss Street. Specialist in corporate reorganizations and turnarounds, former Chairman of two NYSE listed companies. His latest book, The Third Way, describes how to achieve management excellence and financial reward by moving organizations from Conflict and Confrontation to Leadership and Cooperation. He lives in Newport Beach, CA.

Last week, Michigan Governor Rick Snyder signed State Bill (HB 4929) to approve Michigan’s first right-to-work laws for both private and public sector workers that make it illegal to require workers to either join a union or pay union dues without their permission. The law was heralded by conservatives as protecting workers’ right of free association, but was scorned by liberals as destroying jobs at good wages.  But as reward for Michigan’s new pro-jobs environment, General Motors announced they will bring back production of the iconic Chevrolet Camaro to the Michigan from Canada

In his first public appearance after signing the historic legislation, Michigan Governor Snyder was heckled as the keynote speaker for Michigan State University's commencement ceremonies last Saturday as he encouraged students: "We want Michigan to be attractive to you so you stay here".  Inundated by news organizations that had been hoping for some wild protests and counter-demonstrations, Snyder tried to avoid controversy by stating: “I've talked enough about public policy this week...my preference is always to talk to the graduates", even as he did recognize: “there are some people here that don't agree with me today.”

Speaking about his own post-college experiences, Snyder said he chose an accounting job in Detroit over a higher-paying offer in Houston, because the company helped foster his career and allowed him to stay closer to his family and friends.  Union supporters and protesters sneered at Snyder’s noble words as hypocritical rhetoric: "We are here to show our appreciation for the MSU students," said Bill Reed, president of UAW Local 602 in Lansing.  "The trouble is, the governor has not shown that same appreciation. This legislation harms these students' future."

The Camaro decision represents at least 1,000 union jobs and comes as a big win for Michigan's hard-hit auto sector over foreign competition.  It seems that after the GM bankruptcy, higher productivity at plants in the U.S. are reducing GM’s capital investment costs and improving profitability.  Kristin Dziczek, Director of Labor and Industry at the Center for Automotive Research, said labor costs for new hires in Michigan are now lower than the wage costs for veteran unionized peers in Canada, since; "There's a considerable number of entry-level people and a lot of the older workers have already retired or taken retirement incentives."  Dziczek also added that that the relatively strong Canadian currency, known as the loonie, is dragging down Canadian manufacturing sector versus American competition.

In an interesting twist of fate, the Michigan job gains will come from GMs Ontario plant that was the scene of one of the most vicious strikes in labor history.  From April 8-23 1937, more than 4000 workers struck for better wages, working conditions, seniority system and recognition of their new United Automobile Workers union.  The UAW was to be an affiliate of the recently created Congress of Industrial Organization that was organizing industrial workers throughout the U.S.  Ontario Premier Mitchell Hepburn vigorously supported GM management’s efforts to try and keep the CIO out of Ontario.   To break the strike, Hepburn even created his own police force, known as "Hepburn's Hussars" and "Sons-of-Mitches."

Fellow unionists, neighbors and communist activists funded the GM Canada striking workers for 2 weeks.  Eventually, GM capitulated over fears of losing markets to its competitors.  In the April 23 agreement GM accepted many of the union's demands, without recognizing the union.  To gain recognition, the union leadership publicly repudiated the CIO connection.  But everyone knew it was a great CIO victory and the first major one in Canada.  The strike marked the birth of industrial unionism in Canada.

Michigan was hammered with a “D” rating in the 2009 Index of Worker Freedom.  But the success in attracting the Camaro back after passing right-to-work legislation is motivating the Republican controlled Legislature to adopt more pro-business legislation:  

  • HB 5024 would increase penalties for violation of Michigan’s mass picketing statute and allow employers to seek legal means to stop mass picketing;
  • HB 5023 would increase penalties for illegal public sector strikes;
  • HB 5026 would allow employers to more easily hire new workers during labor union disputes.

Rick Snyder had served as the Chairman of the Board of Irvine, California computer maker Gateway, Inc. and Ann Arbor, Michigan based Ardesta Venture Capital, before he ran for Governor in 2010 on the motto: “I'm pro worker”.  With state unemployment falling from 9.4% to 8.9% since August and GM jobs on the way, Snyder is proving that passing right-to-work laws is great for workers.  Cross Posted from Chriss Street's blog.

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Reader Comments (3)

The Trades Unionists should have organised solidarity with the Canadian workers and globalised their operation. If the bosses can shift production to Canada or China why should the workers not shift resistance globally?
Do you think that we stopped sending children down coal mines because the coal owners suddenly became better people? Or because of labour organisation?
The coal owners were vehement in claiming that coal would become prohibitively expensive if they dispensed with child labour.
Slave owners vehemently claimed that the economy would collapse without slave labour.
To celebrate the return of production to Michigan of a machine that contributes to the degradation of the planet for future generations in circumstances that drive down living standards in the present is neanderthal economics. The worst of all worlds.
In the past 30 years wages in America have reduced sharply at the same time as debt has gone through the roof, growth has contracted and GDP has shrunk. Trades Union membership has declined in this period.
A criminal cartel of Financial racketeers is destroying the world's economy and we are encouraged to have concern for the negative impact of largely non existent labour organisations. Really?
It is organised Capital that is destroying wealth. Organised Labour is a benign, civilising and democratising force.
December 21, 2012 | Unregistered CommenterRoger Yates
Employees seeking greener pastures should simply save their own capital, and invest it themselves, in their own business endeavors. Unfortunately, the government-union cartel continuously inflates their currency, granting money to their buddies, while decreasing incentive to save.

Over the last 30 years, the wealth generated during prior eras has been siphoned off by government and its favored fascist partners. The impoverishment of a nation does not come about because of declining trade union membership. It comes about because wealth is stolen... legally... and squandered by the picked winners. Like GM, for instance.

I encourage investors to locate their businesses in regions of the world which are more hospitable to investment. If someone in Africa or Asia has no job now, and you can offer a steady wage, it will improve their circumstances. But beware, the communists will try to justify theft of your capital in the name of "fairness," which they define, of course.

An agreement between employee and employer is not suddenly voluntary when the employees themselves become a cartel. Employees do not need violent organizations to represent them; we are perfectly capable of representing ourselves. What we do need is a level playing field, where the currency is not controlled by favored organizations, including trade unions and banksters, all of whom are sleeping with one another and their governments, while inflation is harnessed to pillage and plunder the unfortunate masses.
December 23, 2012 | Unregistered CommenterRobert Jones
No, the transfer (not loss) of wealth has been caused by the bosses forcing down labour costs in the name of Competition and exporting jobs to places like China. The wealth that then went into the hands of the Financial/Speculation Industry was used to pump up bubbles that have further hollowed out America's economy. The money being printed at present to keep your debt fueled consumer economy afloat in some form, is immediately flowing out to China, which makes the consumer goods being purchased with printed money which is then used to purchase your Bonds. You live on "Entitlements" provided by the Chinese State for so long as it pleases them to keep you afloat. Meanwhile you spend half your GDP on weaponry in a world where peasant armies (Vietnam/Afghanistan) can give you a bloody nose with small arms and explosives made from industrial chemicals bought in the corner shop. Meanwhile you have turned your educational establishments into businesses that educate the Chinese and Indian competition who pay for it up front while you pump up a student loans bubble that will never be paid because people like you @Robert Jones are exporting jobs. Since one man's debt is another man's asset this colossal student loan debt is tanking the second man's investment. Meanwhile (again) the growing Economic movers and shakers and American Educated entrepreneurs in India and China who are aware that doing business with folk who can't pay their debts is unwise, are also aware that they have huge rising populations that will buy their goods internally and not pay for them with worthless bits of paper called Dollars. At which point they will desert "globalisation" and put up trade barriers. At this stage, if you have any sense left, you will disarm and put the productive power released thereby into creating worker cooperatives that produce your own wealth and a decent, civilised welfare system with free education for your own citizens, and sit back and watch the Chinese and Indians wreck their societies as you are now wrecking yours. Running the world in your "interests" is only in the interest of an Elite that has no patriotism whatever. It pays no tax and is a parasitic entity which is the true "State" in modern America. The Government is irrelevant.The multinationals and the Banks are the State. The worker who has lost his job (you sent it to Africa to reward rent seekers on printed money) and is living in a tent behind the freeway will never save enough money to invest in anything. But he is committed to your country. Let him organise and he will evolve a society worth living in. Not a stateist soviet gulag but a sane collective based in devolved power to the population. For this people need to come together. The notion that a mob of atomised individuals each "representing himself" and serving his own "self interest" can create a functioning society is ridiculous. It is an Ideology, no less than belief in the perfection of "The Party" and "The Great Leader" is an Ideology. The little guy can organise his own affairs....Collectively.
December 27, 2012 | Unregistered CommenterRoger Yates

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