Date: Friday, September 15th, 2023
Source: Freight Waves
President Joe Biden’s $9.2 billion electric vehicle manufacturing loan to Ford seems like a perfect meld of American interests. Announced in June, the loan to the Michigan automaker and a South Korean battery manufacturer will spur the building of three EV battery plants in the U.S. That cheerfully means eco-friendly cars and blue-collar jobs — environmentalism with a side of America First.
There’s just one problem: It’s infuriated the United Auto Workers, which represents some 400,000 Americans employed in automotive manufacturing and other trades. The historically Democratic union has, in turn, refused to endorse Biden ahead of a contentious general election.
Two of Ford’s new plants will be in Kentucky and the third in Tennessee; facilities in these three states are notoriously challenging to organize thanks in part to anti-union state laws. To workers like Dan Vicente, a UAW regional director and machine operator in Pottstown, Pennsylvania, it’s a way that Ford can have its cake and eat it too. The auto giant can explore EV manufacturing without much risk to its bottom line, and save massively by avoiding union labor.
“[T]he Biden administration didn’t require any sort of guarantees of those jobs being UAW jobs or being any union jobs at all,” Vicente said on an Aug. 7 episode of Bloomberg’s Odd Lots podcast. “They basically just said, ‘Hey Ford, please be nice to these workers and let them have a vote if you feel like it.’ And so we don’t find that acceptable.”
American businesses and their employees are in an unusual position. Partially thanks to new policy efforts, companies are expanding domestic manufacturing. But they’re finding an American worker who isn’t willing to work for cut-rate pay. Employees are increasingly fighting back on low wages, working hours and mediocre benefits — and are set to walk away from jobs entirely if the terms aren’t right.
An excitable soul might declare we’re in the midst of an American labor comeback after decades of neoliberal policies encouraged crony capitalism, union busting and general skulduggery. According to federal data, nearly 13 million Americans are employed in manufacturing work — the highest number we’ve seen since the Great Recession. The nearly 2 million Americans – ranging from university graduate students to UPS drivers to rail track maintenance workers — represented by Teamsters and the United Auto Workers unions are seeing more militant leadership than ever. And even anti-establishment publications like The Intercept are admitting that the center-left Biden administration has appointed “aggressive” pro-union leaders to the National Labor Relations Board, making organizing easier.
The majority of Americans said in a 2019 Pew survey that there’s “too much economic inequality,” and around 42% believed reducing it should be a “top priority.” Now, after the coronavirus pandemic brought about discourse about essential workers and stock buybacks, one could assume those percentages are even higher.
It seems like reality is reflecting those pro-union sentiments. Automotive workers began an unprecedented strike on Friday, stopping work at all three Detroit automakers for the first time in history. UPS workers got a major win this summer. And nearly 200,000 actors and screenwriters are on strike. American approval of labor unions just hit its highest point since 1965, according to a Gallup poll. For the first time ever, a sitting president is even supporting strikes.
Steven Greenhouse, a former longtime labor reporter at The New York Times, hesitated to say that we’re in a major uprising for American workers. However, he said conditions increasingly favor them.
It’s a bullish sign for the US economy — and freight volumes
During the Great Recession, the UAW was forced to make a slew of concessions to prevent the Big Three automakers from shuttering completely.
In the 2000s, American consumers were increasingly buying vehicles from European and Asian manufacturers as fuel prices soared. Ford and GM posted a combined loss of more than $30 billion in 2008. That trend has reversed entirely; Americans are eagerly buying up pricey pickup trucks and SUVs from domestic manufacturers, even as inflation slams household budgets. Those hefty vehicles have in turn boosted profits at Ford and GM; they made a combined $40 billion-plus last year alone.
As a result, UAW workers are now seeking out a payday that reflects their employers’ windfalls. The UAW is calling for the reinstatement of pensions, retiree health care, cost-of-living adjustments to wages, along with a 40% raise spread over the next four years and the elimination of the two-tiered employment model. These demands aren’t necessarily autoworkers seeking to overturn the system; rather, they’re changes that would restore compensation to pre-2008 standards.
Marick Masters, a business professor at Wayne State University in Detroit, has studied labor relations since the 1970s. He said aims at the UAW and Teamsters alike have become “more socialistic in orientation.” He hasn’t seen leadership like the UAW’s Shawn Fain or the Teamsters’ Sean O’Brien in decades.
“[I]t has a different view of the role of profits and business and believes that labor has a rightful claim to a bigger piece of the pie,” Masters told FreightWaves. I think that both union leaders want the companies to do well so that they can help members. I would think that they would set that as a first priority, in terms of how they want to claim the profits for workers’ increased pay and other benefits.”
Business magnates may groan, but there’s a silver lining: A fired-up labor pool means American businesses are healthy.
“[T]he pendulum has swung back from the 2008 recession, when companies could make a good case that they needed concessions, to a post-pandemic time when automakers’ profits are good and UPS profits are great,” Greenhouse told FreightWaves. “Workers can now say the time for concessions is over. It’s now the time for advances, the time for betterment, the time to make up for what [they] gave up in previous contracts.”
Growth in domestic manufacturing and infrastructure spending is a bullish indicator for freight volumes — even though the industry is presently in a decline. For example, FreightWaves data suggests that the increase in construction spurred by the Biden administration buoyed freight volumes in July 2023, a month that was expected to be weak for truckers amid a weakened consumer economy. If America is making more stuff in America, that means there’s more for truck drivers to haul.
Vicente of the UAW told Bloomberg in August that his colleagues are quitting their jobs to work at Dollar General or Walmart. Vicente’s employer manufactures plumbing, air-conditioning, steering systems and other equipment for boats, 18-wheelers and food trucks. Now, his former co-workers are finding themselves stocking shelves or scanning products — most likely mass-produced plastic stuff made overseas, clothing that will likely end up in a landfill in several months or processed food with little nutritional value.
Of course, one can’t discuss unionized work and the trucking industry without mentioning Yellow, which was the third-largest less-than-truckload company, employing some 22,000 Teamsters workers, until it closed operations in August. Yellow pinned the blame for its shutdown on the Teamsters. For months, the union refused to negotiate on a proposed change of operations. The Teamsters said unionized Yellow employees had given away some $5 billion in concessions to the company since 2008 and refused to cut further. Amid the fracas, the trucking giant eventually lost enough inbound freight volumes that it was unable to pay into a major Teamsters pension fund, triggering a strike authorization. That gutted Yellow’s freight volumes further.
J. Bruce Chan, a transportation analyst at the investment bank Stifel, previously said Teamsters may have been the “trigger” for Yellow’s bankruptcy, but the company had been troubled for about two decades. Yellow took on more than $1 billion in debt in the 2000s as it acquired more and more companies. It was never able to recover from those foolhardy purchases, gutted further by the Great Recession and other poorly timed business decisions.
While the Teamsters may evade some blame, former Yellow employees are baffled as to why the union allowed the company to shutter. Labor expert Michael Duff, a law professor at Saint Louis University, doesn’t believe Teamsters boss O’Brien risked those 22,000 jobs forever.
Rather, Duff said Teamsters likely anticipates increased manufacturing activity in the U.S. — particularly at unionized shops that will only work with organized trucking companies. That means more trucking companies organized with the Teamsters, whether existing unionized fleets grow or new ones join the union.
“I don’t think the union believes we’re going to lose those jobs and they’re never coming back,” Duff said. “Whatever else the Teamsters will be, they’re not stupid.”
Many experts believe a key reason why striking and organizing activity is reaching a historic fervor is the renewed interest by Americans age 40 or younger. They’re old enough to see the issues resulting from rampant globalization and financialization but young enough to not recall, say, Jimmy Hoffa’s Mafia ties. Cornell University’s Kate Bronfenbrenner, who is the institution’s director of labor education research, said this change of opinion among millennials and Gen Zers is a key “turning point” for the labor movement.
“I do think we’re in a moment with public support, with this energy among young people and increased interest in organizing,” Bronfenbrenner told FreightWaves.
One shared demand among union organizers isn’t just around increased pay but more control over work rules. A 2008 New York Times article pointed out that a veteran UAW member made about $28 an hour at an American auto plant, compared to a well-paid Toyota worker in Kentucky earning around $25 an hour. But those workers have vastly different control over their schedules. And rail workers were set to strike in 2022 over having more predictable hours and flexible time off; they received zero days of paid sick leave until this year.
But firms say they need flexibility in scheduling, work rules and positions in order to remain competitive — especially when it comes to competing with nonunion shops. That tension was core to the Yellow-Teamsters dispute that eventually shuttered the company.
Yellow wanted to convert nearly 1,000 linehaul trucking jobs to so-called “utility driver” roles, where they would be expected to do more dock work and the pay was often less. The Teamsters union opposed that. The company fired back with a memo to disgruntled workers: “Let’s be clear: If you were at a non-union company — a very realistic possibility for MOST of you if Yellow does not survive — ALL of you would be subject to potential dock work regardless of your time in the industry.”
Feeling out of control over one’s schedule (and ultimately, one’s life) is what drives many workers to organize, said Bronfenbrenner.
“If they were organizing over money and the employer could just throw a couple of pennies their way, they could get rid of the union campaign,” Bronfenbrenner said. “But the primary reason workers organize tends to be arbitrary supervisor power and respect on the job — things like scheduling, where they can never know when they’re coming to work, which could make it impossible to deal with your children’s day care or do medical appointments.
“Money matters,” Bronfenbrenner added. “But, money is something that the employer can afford to pay if the union pushes them enough. Employers, particularly U.S. employers, don’t like to give up control. They like that they have this God-given right to manage free of any interference from government or unions or anybody else. Those are the things that affect the day-to-day life of workers.”
Regular scheduling was a game changer for Duff of Saint Louis University. During the 1980s and early 1990s, Duff was a claims prevention supervisor at Flying Tiger and then a fleet service agent at U.S. Airways.
In the mornings, every day from 8 a.m. to noon, he attended West Chester University. It took him a decade of blue-collar work, but Duff was able to secure his college degree. Four years after, he got his law degree from Harvard.