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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