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

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

September 16th, 2013 By Robin Smith in Opinion Columns

Robin Smith

Photo by Contributed Photo/Times Free Press.

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.