Fear of the Union

When I started working for my current employer about nine years ago, I didn't think much of the fact that it was an automotive supplier which was not unionized. But as time went on I began to understand the significance. The company was well run. Most of the managers were capable and not simply promoted due to "time in service". The employees were also taken care of. There were many employee programs that you would expect to find at a company on Fortune's list of 100 best companies to work for, though we were to small to be on that list. The employee portion of healthcare was low, there was an annual profit sharing, quarterly bonuses, and numerous other small bonuses and perks. No union would be able to offer the employees anything better than what they already had. But, while I was away beating back the scourge of terrorism, something changed.

Our company has always been owned by a German company of the same name. The parent company would give guidance, but local management appeared to have significant leeway in it's personnel procedures. It stands to reason that they didn't have an interest in American labor economics which is drastically different from theirs.

The German parent company was owned evenly by two separate companies, who did not seem to meddle in the business. And rightfully so, the company was very profitable. But, when one of those companies decided to sell their stake the other happily bought them out.

The other company that bought out our parent company also had operations in North America. The principle difference was that their operations were headquartered in the South. This didn't seem so bad until we started to learn more about this company. They seemed to have at least a few managers who were promoted to their highest level of incompetence, and they certainly did not treat their workers as well. It would seem that they could get away with it since they were located in a right-to-work state. We knew it would only be a matter of time before we started to feel this.

First, the healthcare was changed. The burden of the cost was gradually shifted to the employees. Granted this would "bring them in line with the industry standard", but it would cut into people's real wages. To help offset this pay reduction the also raised the 401k match from 50% to 100%. Of course I ran the numbers and found that I would make out on the deal, but there would be many lower paid employees who would not. Since healthcare costs are equal for all employees, but 401k matching is dependant upon salary, the higher the salary the more you made out on the switch.

Next came the sick day policy. Previously were allowed twelve sick days in a floating twelve month period, which seemed to be very fair. Under the new policy, four sick days in a twelve month period would result in a warning and after the fifth day the employee would be ineligible for any raise. At seven days the employee would be placed on probation and automatically terminated at nine sick days.

Numerous other small changes have occurred, and these have been affecting the ethos of the Ohio based portion of the company.

In my early years of college I had a labor economics professor who said that the unionization of a firm many times signifies a failure of management. As we started to take on their human resources policies, this lecture came back to me and I hypothesized that the Ohio company could unionize if these practices kept up. Fortunately for our firm, the recession took hold and people could see unemployment rising. With unemployment over 10%, most people are just happy to have a job.

But, now that American national politics are controlled wholly by the democrats, who have historically been sympathetic to labor, the company seems to be getting a little nervous. It would seem that once the financial crisis has passed the government will be able to enact more pro labor legislation. The latest company newsletter has an article entitled "Know Your Rights - Get Union Facts", in which the company warns the employees about the Employee Free Choice Act (EFCA).

The article "exposes" the fact that union dues could cost a person $500 a year. But, in reality, that may be less than the monetary losses caused to some Ohio employees by the new headquarter's HR policies.

In fairness, my managers have more than compensated me for any real income losses, and I would certainly not be interested in unionizing. But, mine is only one department, and it's an office department where most of the people are on salary.

From my perspective, the headquarters should look at the culture of their Ohio division to see how to stave off unionization. The Ohio division has had the large unions in its neighborhood since it was fonded over 30 years ago, and successfully fended them off by treating employees very well. Writing articles in the employee newsletter most likely won't be enough.