Automakers worry about union’s money struggles


DETROIT — The United Auto Workers’ membership and dues are down sharply from just six years ago. In another sign of weakness, the union suffered a stunning defeat this month when it tried to organize a Tennessee factory operated by labor-friendly Volkswagen.

The rejection, by a close vote, was a major setback in the union’s effort to expand in the South, where non-union, foreign companies such as VW, Nissan and Hyundai are rapidly growing.

But instead of relief, Detroit’s three automakers — Ford, Chrysler and General Motors — are increasingly anxious about the 78-year old union’s future.

For them, it’s a “devil you know” situation. They worry the 382,000-member UAW could be absorbed by a more hostile union. Such a merger could disrupt a decade of labor-management peace that helped America’s auto industry survive the financial crisis and emerge much stronger, according to a person with knowledge of executive discussions.

Another union might not be as willing to keep labor costs competitive with overseas automakers, said the person, who asked not to be identified because the discussions are confidential.

Despite talk of a union merger, Gary Chaison, a labor relations professor at Clark University in Worcester, Mass., said he doesn’t see the UAW giving up its identity and history by combining with another organization.

“It’s something that the employers always fear,” he said.

Spokesmen for Ford, GM and Chrysler declined comment, and a top UAW official said the automakers’ worries are unfounded.

Even as it struggles, the UAW remains the wealthiest union in the nation, with assets of more than $1 billion at the end of 2012. Officials pointed to a revived U.S. auto industry and more hiring at UAW-represented factories, moves that stabilized membership dues that have been falling since 2006.

Still, the union’s loss at the VW plant in Chattanooga, Tenn., heightened concerns about how it can grow.

Annual dues collected were down more than 40 percent to $115 million from 2006 to 2012, as the union’s ranks fell by 30 percent. Thousands of members took buyouts and early retirement as Detroit’s auto industry lost billions during the financial crisis.

 

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