Neat trick. Build automotive plants where there are few UAW members. Honda (NYSE: HMC) appears to have it down to a science. According to The Wall Street Journal the Japanese car company recently built a plant in Indiana, but was only willing to hire employees from counties that outside the ones where "most of the state's thousands of unionized laid-off auto workers" were located.
It seems that foreign car companies are adroit at avoiding geographic areas where the UAW has members or people are likely to organize. It may be why so many of these plants are located in the South. Right-to-work rules tend to be lenient there. Companies like Honda are willing to take local tax breaks, but often don't hire workers who may be inclined to join a union.
There is a reason that most foreign car factories are not staffed by UAW members, and the move to locate in regions where worker's rights are modest may be a part of that.
As the UAW slowly dies due to downsizing at big US car companies, it would be a huge benefit if it could organize workers in foreign car plants. But, one of the reasons that Japanese car companies have a lower-costs-per-vehicle is that they do not have the legacy pension costs that Detroit does. These costs are the byproduct of decades of living with the UAW.
And, companies like Honda are not inviting the UAW in.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
10-10-2007 @ 10:09AM
jpdr1100 said...
The Japanese build their new plants in right-to-work US states, while Ford builds its new high-volume sedans in Mexico, and Chrysler rushes to begin importing its new compact from China.
And its the Japanese that are being unfair?!
10-10-2007 @ 12:26PM
V.S. said...
One day in the near future, Toyota & Honda will have to face their employees and tell them that their wages are to be frozen because the Big three is gaining market share because their wages are lower now than Toyota's. How will these workers respond to this wage freeze while the companies are paying record bonus's to their executives?? Ought to be interesting!
10-10-2007 @ 12:36PM
jpdr1100 said...
Only problem with your scenerio is that the Japanese companies don't pay "record bonuses" to execs. In good times or bad.
That is an American tradition.
10-10-2007 @ 5:54PM
Jeff said...
Like most non-subscribing narcissist, I want a vehicle that is reliable, gets good gas mileage; windows go back up after they were brought down by an electric button, no break dust on my fancy wheels and it doesn’t cost me an arm and leg to purchase. So where do I get that? Not Ford. So after investing $45,000.00 for what I have outlined, I went to Toyota. Most Americans bitch because they want, but don’t want, Need, but don’t need, So, what is it that you want from your next purchase?
10-10-2007 @ 7:44PM
KGar said...
The reason I buy and have bought Japanese vehicles is simple: QUALITY. Any time I can buy non union I will, but if the product put out by the so called "Big 3" were comparable in quality I would rethink. Unions are a dying breed in this country, that will not change anytime soon.
10-27-2007 @ 1:52AM
Geno said...
"Unions are a dying breed in this country." A statement that is also connected to the shrinking middleclass in America. The unions built the middleclass, and now that the current labor laws in America have been enacted to work against them, they are losing the battle for workers rights in the American work place, and losing jobs to Mexico, India, and China, where workers are paid the equivalent of $4 a day. As the unions shrink, so does the middleclass in America, which is happening right now. The wealthy are getting more and more rich, and the middleclass is sinking into poverty. More and more people are losing their medical benefits, their homes, their futures. So before you look down your noses at unions, think about the generations of your kids coming behind you. The way that unions go, so goes the American middleclass! And a country without a large enough middleclass, doesn't stay a democracy very long!