Automakers mum on Michigan 'right to work'

Ford, GM and Chrysler aren't touching the state's legislative dustup over union dues.

By Jason Notte Dec 7, 2012 4:57PM

Political jostling may make labor union bastion Michigan one of more than 20 "right-to-work" states, but the Detroit Three automakers aren't going to make a peep about it.

After Michigan Republicans lost five seats in the state's House of Representatives in the November elections, new laws making the payment of union dues voluntary became a priority.

Republican Gov. Rick Snyder once considered the legislation too divisive, but fast-tracked it to the House on Thursday, where it passed 58-52. A Senate measure covering private-sector workers passed 22-16 on Friday, with a second bill applying to government employees passing 22-4 after Senate Democrats walked out. Republicans hold majorities in both chambers.

The House and Senate are slated to vote on each other's bills on Tuesday, and Snyder has stated he will pass the legislation as soon as it hits his desk. Given the United Auto Workers' role in bailing out both General Motors (GM) and Chrysler, however, it's highly unlikely that either automaker or the UAW-heavy Ford will be cheering the potential benefits to their bottom line.

Chrysler should be particularly mum, as the UAW still owns a more than 38% stake in the post-bailout company. GM won't be saying much about the move, either, as the UAW and its Canadian counterpart took a 17% stake in the company as part of its bailout in 2009. Only the U.S. government had a larger stake at 60.8%.

Ford (F) didn't take a bailout, but its 2007 deal with the United Auto Workers that took worker pensions off its books helped buoy its recession-era fortunes. Even if the three automakers were to derive some sort of financial benefit from right-to-work legislation, that wouldn't make waving it in workers' faces incredibly wise.

"For existing employers it doesn’t provide a benefit and may be a detriment," Dale Belman, a professor at Michigan State University’s School of Human Resources and Labor Relations, told the Detroit Free Press on Thursday, citing worsening labor relations in right-to-work states.

This also isn't exactly a settled matter for Michigan politicians and labor unions. CNN showed  union officials and workers still protesting at Michigan's capitol building while union leaders are still considering ways to overturn the law once the new legislature goes into session next year.

"I think we are in for a multi-year battle over what this means for the state," Kristin Dziczek, director of the labor and industry group Center for Automotive Research in Ann Arbor, told the Free Press. "This is not over when this legislation passes."

The automakers got a good look recently at just how messy labor unions can get when the cameras are on. How did people react when Twinkie maker Hostess closed down and blamed unions for not making financial concessions? Loudly and angrily. How did those same folks react when they found out Hostess' chief executive Gregory Rayburn didn't part with a dime of his $125,000-a-month salary to keep the bakery afloat? Loudly and angrily.

Perhaps the best reason to keep mum is that any windfall the automakers may receive will likely come out of its workers' pockets. Elise Gould and Heidi Shierholz, researchers at the Economic Policy Institute (EPI), studied what they called "the compensation penalty of 'right-to-work' laws" and found that wages decreased an average of 3% in right-to-work states, health insurance benefits fell by a similar margin and retirement plan contributions decreased 5%. Unions, meanwhile, point to Department of Labor and Census Bureau data showing that workers in right-to-work states make an average of $5,500 less than their union-state counterparts while working in states with 53% more workplace deaths.

The Detroit Three are also in no position to wail about labor woes. General Motors still controls 18% of the U.S. market and has seen sales increase 3.5% year to date. Second-place Ford accounts for 15.5% of all cars sold here and watched sales rise 5%. Chrysler, with its more-than one-third union ownership, still lags behind fourth-place Toyota's (TM) sales, but parted with 22% more cars this year than it did in 2011 and increased its market share from 10.7% to 11.4%.

With Michigan's right-to-work debate generating plenty of noise in the state's capitol building and on its airwaves, the state's automakers can be forgiven for keeping quiet on the matter for a while.

More from Money Now

Dec 7, 2012 6:39PM
Even as American corporations have more cash in reserve than any time in history, they are still telling us they can't afford to pay higher wages and hire people.
Dec 7, 2012 8:28PM
no more money for the feds. They waste way to much and then they really don't care. Its not their money its our money. If you think they need more money send it to them and stop stealing mine.
Dec 7, 2012 6:00PM

If it's not make from start to finish on American soil it's not American. That doesn't mean just assembled here.

But then we would have a lot more bad air.  Oh well what good is a country with clean air and no jobs, food or clothing.

Dec 10, 2012 1:48PM
Should you be forced to join a union? No way in hell.
If you are forced for some reason to join a union, should you be forced to pay dues? No way in hell.
If you voluntarily join a union should you be forced to pay dues? Yes, of course.

Union members should have the final say on what gets done with the dues. But that's up to each union. If you don't like what they do with YOUR money, quit or become a union boss.

Dec 7, 2012 6:44PM
What's the problem? The Republicans won the election there. The people have spoken.
Dec 7, 2012 6:31PM
Prosperity through lower wages?  Really??
We the people know why we are in this mess but you won't do anything about it. You can't bitch, moan, and complain about China or any other country but we keep buying the product. And the thing is, we keep buying the product because of price. Anything "Made in the USA" is overpriced because of the lifestyle we want to lead here. Would you take a job that pays $2.50 an hour in this day and age? We have this problem called "Inflation". The higher the prices the more money your employer has to pay you. When you get that raise, the insurance company knows it, the grocery store knows it, the gas station knows it, hell, everybody knows it. So, what happens? They want a piece of your raise! Elementary my dear Watson, Elementary. There is no way we in the good ole U.S.A will stop doing business with foreign countries. We have to compete. But we won't give up our freedom nor should we. We The People better keep a sound eye on Washington and who you elect to office. 
Dec 7, 2012 6:29PM
When you say people reacted loudly and angrily at Hostess blaming the unions are you talking about union people?  Most of the rest of us blame both the unions arrogance and the company's lack of leadership, so we consider it a draw, with the company going out of business and the union employee's winning the fight and losing the war as well as their jobs.
Dec 9, 2012 11:38AM
I believe in buying as much American made products as possible. I am a immigrant in this country but proud to call it my home! 
Dec 7, 2012 8:37PM

 wages decreased an average of 3% in right-to-work states, health insurance benefits fell by a similar margin and retirement plan contributions decreased 5%. Unions, meanwhile, point to Department of Labor and Census Bureau data showing that workers in right-to-work states make an average of $5,500 less than their union-state counterparts while working in states with 53% more workplace deaths.

that's all i need to know.

Dec 7, 2012 8:51PM
Dec 7, 2012 6:34PM
BO loaded up the NLRB with pro labor choices. Oops! Went right around that with no trouble at all.
Dec 11, 2012 2:37PM
Funny how the left is only in favor of freedom of choice when it comes to abortion.  On every other issue, they are consistently anti-choice.  They don't want to let you choose what food you eat or what chemicals you put in your own body.  They don't want to let you have the choice about joining a union or paying union dues.  They don't want you to have a choice when it comes to education or healthcare or what you drive or how you pay for your retirement or how much you charge for an hour of your own labor.  As far as the progressive left is concerned, choices are only allowed as long as you choose the ones they agree with.
Dec 8, 2012 2:08PM

The Governor of Michigan(GOP), is a smiling, slippery, s-o-b, that thinks he's slick and shrewd...

The People of the State haved been duped by many of the Big business'...Hello Michasippi.


With a little luck the electorate, will wise up if they have any sense at all...

But as usuall big money rules.... 

Dec 10, 2012 2:03PM
Seems like the dumb azz union hacks have it wrong, calling voluntary membership  unAmerican? Voluntary membership seemd quite democratic. Perhaps if these morons had brains, an education, or marketable skills they wouldn't need a union to artificially inflate their wages.
Dec 7, 2012 6:41PM
Another example of our system called "Plutocracy."  If you don't know what it means then Google it.
Dec 9, 2012 3:04AM

Life is great!


Chris Van Hollen & Elizabeth Warren in 2016 & 2020!


God bless Unions and living wages!


God bless America!

Dec 7, 2012 8:37PM
cool Just what was voted for WELLFARE!!!
Dec 11, 2012 11:12AM

There`s a lot of Republicans are against the minimum wage.We need tax breaks for the rich

and skilled jobs that pay $3 an hour so we can compete with China.Thank the last 7 presidents

for kissing China`s rear.

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