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Wednesday, April 7, 2010 as of 11:14 AM ET

Economy

Jonathan Serrie

Atlanta, GA

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Southern Auto Industry Influences Unions

July 23, 2010 - 7:20 AM | by: Jonathan Serrie

Hundreds of applicants stand in line at a BMW jobs fair at Spartanburg Community College in Upstate South Carolina.

“To make the money that I want to make… I will drive almost three hours to get a job,” said Cynthia White of Salisbury, NC, who lost her job with a trucking company one and a half years ago.

BMW has announced it’s adding about 500 jobs to its South Carolina manufacturing plant to meet increased orders — a sign of the relative health of foreign automakers building cars in largely Southern, non-union plants.

The success of America’s “other” auto industry has prompted labor unions representing workers at Chrysler, Ford and General Motors to agree to dramatic changes over recent years.

“The fact is that union and non-union pay rates now, and benefits for that matter, tend to be almost identical,” said Leslie Hough, project director of National Community Development Services, an economic development consulting firm. “Part of that is the result of the concessions that unions have granted to the Big Three for competitive reasons, just out of necessity.”

From an employer’s perspective, non-union shops continue to provide the advantage of “management prerogative,” the authority of a company to assign and direct its workforce without having to negotiate with a union.

But even that is beginning to change, according to Hough:

“The United Auto Workers has provided greater management flexibility in their plants than was once the case. They tended to have, at one time, very complex job classification systems, for example, where in a plant you might have dozens or more particular job classifications. And if there was work to be done, you had to call in a particular skilled worker for that job. Those systems have been fairly dramatically simplified in unionized plants, giving management more flexibility. Is it the same as in a non-union plant? No. But it is significantly better, if you’re measuring stick is management flexibility.”

Hough said, while the South’s largely non-union workforce has likely played a role in drawing foreign automakers such as BMW, Hyundai, Kia, Mercedes, Toyota and Volkswagen to the region, many other factors are in play such as the availability of inexpensive land to build new plants, proximity to railways and ports and mild winters that are less likely to cause shipping delays. Southern state governments have also been aggressive in offering incentives in the form of tax breaks and infrastructure improvements.

Foreign auto manufacturers downplay the role “Right to Work” laws played in their decisions to locate in the South, and tout their ability to work fairly and effectively with employees in both union and non-union environments.

“The positive climate is when you are in a particular community, you fit into that community,” said Bobby Hitt, BMW’s manager of media and public relations. “So, if that community has a tradition with unions, then you may have a union there. If it doesn’t have a tradition for unions, then you may not have a union there… In every instance in parts of the world, we do what is local.”

“We stick to the culture and the rules in the country we have,” said Hans Herbert Jagla, executive VP for the new Volkswagen plant in Chattanooga, Tennessee — which is expected to begin producing a new midsize sedan early next year. “Here, the people will decide about representation.”

In the South, foreign automakers enjoy a good reputation among the workforce.

“I think BMW has a habit of taking care of their people,” said Jimmie Peak, who is applying for a position with the German automaker after losing his job with a local health care company following an injury.

Fellow applicant Jerry Sapienza said, “A good company won’t need a union because they will be paying their people well and will be benefiting them well.”

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