Reagan’s Tennessee

If you’re really into irony – liberals are and conservatives aren’t – you should consider moving into the Hollywood Professional Building at 7046 Hollywood Boulevard, at Sycamore. It’s a neo-gothic hoot from 1925, from the architect Richard D. King, and has now been converted to luxury apartments, but from 1930 to 1934, the Academy of Motion Pictures Arts and Sciences, the Oscar folks, had their offices there, and when Ronald Reagan was president of the Screen Actors Guild, from 1947 to 1952 he had an office on the eighth floor. That’s where you want to live, in the former office suite where Reagan worked as the head of a real honest-to-god labor union. You can walk to the Oscars each year, less than a hundred yards east of your front door or you can just sit at home and savor the irony of Ronald Reagan, the union boss, haunting the place.

Yep, Reagan was once a Union Man. It’s just that things got complicated – as they always do. Ronald Reagan started his anti-communist thing after World War II, and in 1947, the Screen Actors Guild, his union, was asked to mediate between a few other industry unions. Reagan stepped up and butted heads with Herb Sorrell, the head of the Conference of Studio Unions, a guy who made no bones about his views on workers’ rights, views that to some seemed communist, and probably were just that. Reagan didn’t like the guy and in 1947 the Screen Actors Guild elected Reagan their president, the first of his five consecutive terms. Reagan then testified as a friendly witness for that famous Committee on Un-American Activities, after which the Hollywood Ten were off to prison and quite a few other writers and directors were blacklisted, not to work in Hollywood for many decades. Reagan seemed to think he was choosing between workers’ rights and fighting the evils of communism, one or the other, and decided that workers’ rights had to be jettisoned for the greater cause.

That was the turning point. Reagan later decided he didn’t like unions much anyway. There was what he did to the Air Traffic Controllers union – in 1981 he broke that union and put it out of business, but that’s how things go with these Republican guys from California. In the early fifties, the then still quite conservative Los Angeles Times pretty much created Richard Nixon’s political career out of thin air – another guy who wasn’t exactly a friend of the working man. There’s a lot of history out here of labor-rights battles. It’s the never-ending conflict between the folks who own everything, and want to keep all the goodies, and those who work for them, who are willing to organize to demand a fair share of those goodies for the work they do, and decent hours and a safe workplace too. Maybe they are communists, really, but maybe they’re just honest workers demanding the right thing.

America has never figured all this out in any way. There’s the labor martyr Joe Hill – who got his start organizing the dock workers down the way out here in San Pedro and was later murdered for organizing mine workers in Colorado, or was a murderer himself, depending on who you believe. It’s just that those who have the courage to stand up to the big bosses, for their fellow workers, can end up doing thuggish things. Jimmy Hoffa comes to mind. He was no sweetheart – but then there’s a long history of big bosses hiring thugs to mow down striking laborers. They play hardball too, and people die.

People tend to choose one side or the other in these matters and Republicans long ago made their choice, the Reagan choice, reframed into what they say is now obvious. Think about it. Aren’t all American workers basically just scum, really, both lazy and greedy, demanding unnecessarily high wages, and costly benefits, and a pension plan or at least a 401(k) plan with matching employer contributions, ruining America’s businesses with all this nonsense? How is anyone supposed to make money under those circumstances? And why do we have a minimum wage at all?

They may not put it quite that way, but that’s the general idea. Communism is long gone, thanks in small part to Ronald Reagan, or thanks to its inherent flaws, but that doesn’t seem to matter. There is still capital, the few who own the means of production, and there’s still labor, those who do the work and would like to get paid for it, and paid enough to live somewhere other than on the edge of poverty, or over the edge into food stamp territory. Safe working conditions would be nice too, and a healthcare plan of some sort, or maybe even a 401(k) or a pension – but all these things cost money. How is anyone who has worked hard to own the means of production, starting a clever new business, supposed to make money if workers want all this? If a business owner concedes a little, providing his or her workers better wages and safer working conditions and a few more benefits, what the hell are they supposed to tell their shareholders, who put good money down to fund this clever business and expect a reasonably healthy return on their investment? Shareholders expect a “lean and mean” operation, but not because they want those whom they have funded to be mean and nasty just for the hell of it. It’s just that meanness is good business, even if many get hurt badly, unfortunately. That’s just how things work in the real world – but that only means that while communism may be long gone, the underlying conflict remains. Workers are still necessary, for now, but they do ask for stuff for their work, and it’s best if you can stop them from organizing into a union, to gang up on you.

That’s not to say this union thing hasn’t been resolved. Sixty years ago, about thirty-five percent of the American workforce was unionized – almost entirely in the private sector. Today only 11.3 percent is unionized and about half (49.6 percent) of this tiny minority are government workers. Reagan, the Union Man who decided he’d rather not be a Union Man, won whatever battle he came to imagine between capital and labor. Capital won, and the Republican Party has committed itself to protecting all the poor beleaguered business owners in America from those who would gang up on them and keep them from making an honest buck in this difficult world. Republicans want businesses to thrive, so America will thrive – and workers will benefit from that, one way or another, eventually, maybe. And if they ask for anything, or have the temerity to “demand” it, they’ll be cutting their own throats – businesses will go under and there’ll be no jobs for anyone, even crappy jobs. Who would want that?

These battle lines were drawn long ago, but only here. Europe has long had Works Councils – an odd arrangement where labor and management decide, together, all sorts of things about schedules and safety and production decisions, as both sides have a stake in the business doing well. These are formal organizations put in place to work out how best to run things, so neither side gets screwed and whatever is being produced is damned good. It’s a win-win thing, and most effectively used in Germany – both VW and BMW say this is what has made them so successful. In the early nineties, Harvard labor-law expert Paul C. Weiler interviewed managers about why they loved these works councils and one executive offered this:

There are three major advantages of councils. You’re forced to consider in your decision making process the effect on the employees in advance… this avoids costly mistakes. Second, works councils will in the final run support the company. They will take into account the pressing needs of the company more than a trade union can, on the outside. And third, works councils explain and defend certain decisions of the company towards the employees. Once decisions are made, they are easier to implement.

Why fight pointless battles? All parties want the business to thrive. That’s good for everyone, so labor gets a seat at the table, as an equal partner. Works councils, elected by all workers in a factory, both blue and white collar, whether or not they belong to the union, help decide things like staffing schedules and working conditions, while the union bargains on wages and benefits. They have the right to review certain types of information about how the company is doing financially, which often means that they’re more sympathetic towards management’s need to make cutbacks when times are tough. During the recession, for example, German works councils helped the company reduce hours across the board rather than laying people off, containing unemployment until the economy recovered. Works councils are also not allowed to call strikes, but they also don’t usually need to, because their authority is built into their agreements with the company – and, in Europe, usually enforced by law. If a union wants to strike over wages and benefits, it’s still able to do so, but the likelihood of arriving at a mutually agreeable solution without one is much higher. What’s not to like?

That’s why VW wanted its plant in Chattanooga, over here, to go union. VW’s global works council leader, Bernard Osterloh, says that the company sees its culture of worker codetermination as a “competitive advantage” in the ever more daunting car market, but that was a difficult sell:

Top Volkswagen officials are trying to quell fears among Tennessee politicians about efforts to work with a union to create a German-style works council at the automaker’s lone U.S. plant in Chattanooga. So far the GOP leaders remain unconvinced.

Labor representatives, who make up half of the Wolfsburg, Germany-based automaker’s supervisory board, have pressured VW management to enter discussions with the United Auto Workers about representing workers at the plant, because U.S. law would require a works council to be created through an established union.

Bernd Osterloh, the head of the Volkswagen’s global works council and a member of the company’s supervisory board, was among a delegation of company leaders who visited the plant Thursday and later met with Gov. Bill Haslam and fellow Republican U.S. Sen. Bob Corker in Nashville.

That didn’t go well. VW was offering this – and Haslam and Croker said do that, set up a works council, and all your tax breaks will go away and you’ll have to shut up shop and move to some other state – we don’t want your damned plant here – we’d rather have three or four thousand of our citizens suddenly unemployed than have a union shop in the state.

They said this was a matter of precedence. What other business would want to set up shop in Tennessee if the state tacitly allowed workers to join unions and demand all sorts of things that destroy businesses? Look at Detroit! They couldn’t stop the vote – workers have the right to choose to join labor unions – but they were putting the pressure on the Germans. And VW would obvious send new work, some new SUV or something, somewhere else if the union was approved, because they’d have to seek lower labor costs. So the message was clear. Back off, or suffer the consequences. The Germans had their answer. Forget Detroit – look at Wolfsburg! And why would we send work elsewhere if works councils are what we use to be successful?

This was going nowhere, but it didn’t matter. At that Tennessee factory workers rejected representation by the United Auto Workers union in a 712 to 626 vote with an 89 percent turnout – so the whole issue was moot. Reagan had long ago created all those Reagan Democrats anyway – those who’d like a better life in the workplace, but know they shouldn’t, because that’s kind of communist. There seems to be a lot of those in Tennessee, or a lot of low-level Republicans who know unions like the UAW always support only Democrats. They’d have none of that.

Curiously, that wasn’t the end of it:

Volkswagen’s top labor representative threatened on Wednesday to try to block further investments by the German carmaker in the southern United States if its workers there are not unionized….

German workers enjoy considerable influence over company decisions under the legally enshrined “co-determination” principle which is anathema to many politicians in the U.S. who see organized labor as a threat to profits and job growth.

Chattanooga is VW’s only factory in the U.S. and one of the company’s few in the world without a works council.

“I can imagine fairly well that another VW factory in the United States, provided that one more should still be set up there, does not necessarily have to be assigned to the south again,” said Bernd Osterloh, head of VW’s works council.

“If co-determination isn’t guaranteed in the first place, we as workers will hardly be able to vote in favor” of potentially building another plant in the U.S. south, Osterloh, who is also on VW’s supervisory board, said.

The 20-member panel – evenly split between labor and management – has to approve any decision on closing plants or building new ones.

Maybe they don’t want to have a plant in Tennessee now, or anywhere they can’t do business in a way that has proven, beyond all doubt, to make them successful. Haslam and Croker, typical Republicans, wanted to cripple them. The Germans would rather be successful, and by the way, Reagan is dead.

Ed Kilgore has an interesting take on this:

I’m sure most Republicans don’t consider Osterloh a legitimate representative of VW management, which has had this socialistic “co-determination” system foisted upon it by socialistic Big Government in Germany (known to U.S. conservatives in other contexts, of course, as the heroic champions of public-sector austerity). But the fact remains that Bob Corker and other noisy opponents of UAW representation of VW workers in Tennessee used the argument that VW would surely send any new work somewhere else if the union was approved to great effect in the run-up to last week’s election. It would be richly ironic if that argument turned out to be off by 180 degrees.

Aside from the specifics of VW, this development is a reminder that employers actually care about some things other than minimizing business costs. If politicians insist on giving them subsidies and freedom from regulations and reducing the bargaining power of their workers, they may gladly pocket such concessions. But the idea that screwing workers and the public is the only path to economic development isn’t at all irrefutable outside the fever swamps of those avidly pursuing a race to the bottom.

Similarly, in the Guardian, Sadhbh Walshe offers this:

Do American auto workers have an inferiority complex? Do they suffer from such low self-esteem that they believe they should be paid significantly less than their counterparts in other countries who build the same cars for the same company? Would they really prefer to have no say, whatsoever, in how their companies are run, even when their employers are keen to offer them a seat at the table?

She points out the obvious, that there was no opposition from VW management, who agreed to remain neutral in the process. They had even invited UAW representatives onto the factory floor to explain the benefits of the works council things, not that it mattered, even if it should have mattered:

As things stand Chattanooga workers have no say in the company’s decision-making process or in any negotiations surrounding pay or work conditions. It should come as no surprise then that workers at this plant get paid considerably less than workers at other VW plants around the world who do have a say.

In Germany, for instance, auto workers at VW plants get paid an average of $67.14 an hour. That’s more than double the average hourly rate for an established unionized worker in Detroit, and it’s more than three times what the non-unionized workers in Chattanooga can hope to earn. According to a company spokesperson, new hires at Chattanooga start at $14.50 an hour, a rate that gradually increases to $19.50 an hour after three years on the job.

This brings me back to my original question – do American workers have an inferiority complex that makes them willing to accept an lower salary than they deserve, and, if so, why?

She wonders about that:

According to reports from the ground, one of the reasons many workers cited for opposing the unionization plans was that they were satisfied with their job and felt they were well paid. It’s true that with Tennessee being a so called “right to work” state, where wages are generally low and poverty is high, $19.50 an hour probably seems like a pretty good salary. But when their European counterparts, working for the same employers, doing the same work, make more than three times what they do, shouldn’t these workers be feeling less satisfied than screwed?

To be fair to the Tennessee auto workers, they have been relentlessly undermined by Republican lawmakers in the state who seem to think that their only route to job security (forget about prosperity) is to shut up, show up and accept whatever pay rate and working conditions their employers see fit to bestow on them.

That seems to be the Republican view of things, but consider this:

Just try to imagine what would happen if German auto workers were told that they would have to accept a major salary cut and give up their many other perks because workers in the US were being paid so much less than them. You can’t, right, and that would be because such a situation will never arise. The reason it will never arise is that the Germans have very robust unions and because these unions don’t have to operate in a toxic political climate, they are mutually beneficial to workers and management alike, not to mention the broader economy. …

The UAW had hoped to bring some of this respect and harmony to several non-unionized foreign owned auto plants in the south by agreeing to try the works council approach. Sadly, for the time being at least, their efforts have been derailed.

All is not yet lost however, as the UAW has vowed to fight on and has already been contacting workers at the Mercedes Benz plant in Vance, Alabama, to try to get a works council set up there.

Yeah, she said Alabama. Good luck with that. Ronald Reagan still walks around down there, chatting with Richard Nixon and Barry Goldwater. Meanwhile, out here in Hollywood, someone is living in a luxury apartment eight floors above Hollywood Boulevard, with the ghost of that old union boss, Ronald Reagan, who once knew better.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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One Response to Reagan’s Tennessee

  1. Rick says:

    “Ronald Reagan was president of the Screen Actors Guild…”

    It may be ironic, yes, that a famously conservative Republican (and, by the way, a former neighbor of mine when I lived in California) should once be president of SAG, a labor union. But also ironic, for me, is the fact that the present president of SAG, Ken Howard — who happens to be a friend of mine from high school in Manhasset, Long Island — is, I’m pretty sure, also a conservative Republican.

    At least I think he is. I once googled him and saw he gave money to Republican candidates, but not Democrats. I hope I’m not slandering him if I’m wrong about that. (If so, my apologies, Ken.)

    But if I’m right, it shouldn’t be that surprising, since Manhasset, where I was partly raised by a Republican family, was a pretty conservative Republican place. In fact, because of my Republican upbringing, I learned to distrust unions, and absolutely abhor the idea of “public” unions — that is, labor representation for policemen, firemen and public school teachers, not to mention air-traffic controllers — believing back then, as did most Republicans, that while coal miners may have earned the right to close down their mine in a strike, nobody had the right to illegally shut down any part of government! (Hey, talk about your irony?)

    But after going to work for big media in New York City — and despite my change of party loyalties — my ingrained distrust of unions was validated after witnessing union thuggery and intimidation, including workplace sabotage, among union members who saw the labor/management divide as just a fact of nature — in which the two sides would always demand too much of the other. And yet, when my then-fiance’s company grossly mistreated her, it was a union, the Writers Guild of America, that came to her defense — on its own nickel, I might add, since they had nothing to gain from doing so.

    That’s one reason why I’ve always had mixed emotions about unions. I dislike them when they act like street gangs, but I must admit, unions often operate almost purely out of principle, and I’ve come to believe that, on balance, labor unions do much more good for a country than harm — considering that, without outside pressure of some kind, companies in competition with each other would never — could never — allow for a five-day work week of eight-hour days, paid vacations, and nor would they, on their own volition, restrain themselves from hiring kids, paying them pennies to do what their parents should be doing for real wages.

    And so I do like this “works councils” idea. Maybe it’s the solution to our dysfunctional bi-polar American system that never seems to find the right balance.

    One irony, of course, is that these same states originally lured these foreign car companies down south with promises of “Freedom!” — which, one could easily infer, was supposed to mean freedom from labor unions — something, it turns out, these companies might not care that much about — not to mention government pressure — something, it seems, they do!

    So one can’t help but love the brain-twisting thought of these slug-brained Republican politicians, trying to use the power of government to compel businesses (!) to do business the “Republican Way”, possibly producing the consequence of forcing these European factories back up north into Democratic territory, where they just might find the business environment less stifling.

    Rick

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