July 13, 2011 / 11:41 PM / in 6 years

UAW sees its future: organize Southern US plants

* Most nonunion auto plants in U.S. Southeast

* U.S. automakers want to narrow pay gap

* UAW-U.S. automaker labor talks begin last week in July

By Bernie Woodall

DETROIT, July 13 (Reuters) - The time for the United Auto Workers to win the hearts and minds of nonunion workers in southeastern U.S. plants is now in one top union executive’s opinion.

“If not now, when? We are going to fix it or we continue to do what we’re doing. You keep kicking the can down the road or we’re going to fix it,” said Gary Casteel, director of the UAW region that includes Tennessee, South Carolina, Alabama and Georgia where most of the nonunion auto plants are located.

Casteel echoes the belief of his boss, UAW President Bob King, who has staked his reputation and the union’s future growth on winning votes to represent workers at those plants. A failure would likely result in a marginalized organization.

The importance of attracting workers at nonunion plants will be underscored when the UAW opens negotiations for new four-year labor agreements with U.S. automakers General Motors Co (GM.N), Ford Motor Co (F.N) and Chrysler Group LLC later this month.

“The UAW will exist whatever happens with this organizing campaign, but it is pivotal for the kind of bargaining power in the industry and the kind of broader national presence that the UAW would like to have,” said Harley Shaiken, a labor professor at the University of California-Berkeley.

“Simply put, if (the UAW) is bargaining for the three Detroit automakers, that is an increasingly a smaller share of the pie in the U.S., even if that stabilizes or grows,” he added.

Shaiken called the UAW’s effort to organize workers in the South “unprecedented” because it also involved talking with company executives to convince them that the UAW can make for healthier companies.

The UAW has its latest target in sight as employee representatives for Volkswagen AG (VOWG_p.DE) are in talks with the U.S. union over organizing workers at the German automaker’s new plant in Chattanooga, Tennessee, Casteel told Reuters on Wednesday.

Establishing a foothold in one of the foreign automakers’ U.S. plants would be a huge victory for a union that has seen its membership fall 42 percent since 2004 to about 377,000 at the end of last year. And the drop is even larger from its all-time high in 1979 of nearly 1.5 million members.

King has been clear that the union’s future depends on signing up workers in these plants.

“If we don’t organize the transnationals, I don’t think there is a long-term future for the UAW,” he said earlier this year.

UPHILL BATTLE

However, the union faces many challenges, starting with convincing workers in the largely anti-union South, Casteel said.

Many workers the UAW representatives speak with feel threatened by their bosses about talking with the union, he said. That’s a big reason why King has pushed -- unsuccessfully so far -- for companies to allow the UAW to freely speak with its workers at their factories rather than the more laborious task of going door-to-door.

Casteel also said it is difficult to convince workers who are just happy to have jobs that in many cases are in areas where the local economy is weak.

Rod Parker, a 42-year-old worker at the VW plant in Tennessee fits that description. He said he likes his job at VW because of the “growth opportunity at a time of a lot of shrinkage” and wouldn’t join the UAW if asked.

THE UAW GHOST

The UAW in the past has repeatedly failed to organize workers at the U.S plants of such automaker as Japan’s Toyota Motor Corp (7203.T), Honda Motor Co (7267.T), and Nissan Motor Co (7201.T), South Korea’s Hyundai Motor Co (005380.KS) and Kia Motors (000270.KS) and Germany’s VW, BMW (BMWG.DE) and Daimler AG’s (DAIGn.DE) Mercedes-Benz.

However, the UAW remains a presence in the South, as companies must pay higher wages than they might to fend of the union, said Kristin Dziczek, labor and industry director at the Center for Automotive Research in Ann Arbor, Michigan.

“When you look at wages that are paid in the auto industry, the internationals, some of them pay as much, in one case at least, more than UAW wages,” she said.

“I don’t know that they do that solely out of the goodness of their hearts or if they do that to head off any kind of organizing attempt,” Dziczek added. “If they weren’t afraid of being organized, they would pay whatever they wanted.”

    One argument the UAW must drive home to their nonunion peers is that it is in their long-term interest to join the union because a weaker UAW will have less ability to influence higher wages and benefits, Shaiken said.

    “If the UAW disappeared tomorrow, your wages are going to go down,” he said.

    The UAW already has seen that influence wane as newer entrants VW and Hyundai Motor Co have the two lowest labor costs in the U.S. industry.

    GAP NARROWING

    The restructuring of retiree health-care costs in 2007 when formal negotiations between the UAW and the big U.S. automakers was held led to a narrowing in the difference in the total compensation received by workers at the so-called “Detroit 3” U.S. automakers and the nonunion companies.

    For instance, GM’s total compensation rate for its workers is now about $57 per hour, while Ford’s is $58 and Chrysler’s $49, according to Sean McAlinden, chief economist at the Center for Automotive Research. That compares with $51 to $52 for Toyota, $50 to $51 for Honda, $45 to $48 at Nissan, $44 at Hyundai and an estimated $50 for both BMW and Mercedes-Benz,

    Volkswagen, which officially opened its Tennessee plant in May, pays about $30, McAlinden said.

    VW officials point out that base salary for their Tennessee plant workers will increase over the next three years by steps to $19.50 per hour from $14.50 now.

    While that nearly matches the entry level wage for U.S. automakers, each of them have veteran production workers making twice that hourly wage. Chrysler’s all-in compensation rates are less because among the Detroit 3, it has the highest number of new workers making the “second-tier” wage rate.

    Ford and GM labor negotiators will press in the upcoming talks to narrow the gap further.

    The UAW hopes to change the conversation by organizing the VW plant.

    VW may be a better fit for the UAW as the German automaker is used to dealing with union workers in Germany, where almost all of its workers are represented by IG Metall.

    Often during speeches, King cites the “German example” -- including having board representation -- as a way forward for union’s less adversarial relations with the three U.S. automakers.

    Additional reporting by Deepa Seetharaman and Ben Klayman; Editing by Lisa Shumaker

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