June 15, 2000
BY JOHN LIPPERT BLOOMBERG NEWS
Magna International Inc. faces a union organizing vote at seven Michigan plants on June 29, just as the auto-parts maker is nearing an agreement that could accelerate labor drives at its factories in Canada.
Canada's biggest auto-parts manufacturer has 59,000 employees in 174 factories in 19 countries. All but a handful of its U.S. and Canadian factories are union-free, making it a high-profile target for both the United Auto Workers union in the U.S. and the Canadian Auto Workers union in Canada.
Growth at union-free companies threaten the unions, which represented about three in four parts workers in the U.S. and Canada in the 1970s. Today, the UAW represents just about a tenth of the U.S. workers while the CAW covers half of the Canadians. The Magna campaigns are bellwethers on whether the unions can reverse the slide, an analyst said.
"Unless the unions establish a wage pattern that's applied to everybody, individual companies will fear being put at a competitive disadvantage and will continue resisting," said Dan Luria, an analyst at the Industrial Technology Institute in Ann Arbor, Michigan.
In 1998, production workers at nonunion Michigan suppliers earned $10.06 an hour, compared to $13 an hour at unionized plants, according to a University of Michigan survey.
The UAW started an organizing drive at 17 Michigan factories with 3,000 Magna workers on May 2, though the campaign is now focused on seven plants employing about 1,850.
Workers will vote June 29 at Magna factories in Troy, Auburn Hills, Brighton, Warren, Howell, Boyne City and Alto. The union typically doesn't seek a vote unless it believes it has the support of about 70 percent of workers. On June 5, about 60 workers at Brighton chanted "Union, union" as they presented Magna management with a petition, according to a UAW Web site.
UAW spokesman Frank Joyce didn't return calls seeking comment.
The CAW won its first organizing victory at a Magna seat plant in Windsor, Ontario, in October. The company is contesting that victory on procedural grounds.
Still, the two sides have reached partial agreement on a "framework" that would allow them to coexist with each other, said Don Amos, Magna's vice president for human resources. He wouldn't specify the content of the agreement.
Hemi Mitic, an aide to CAW President Buzz Hargrove, confirmed the partial agreement and said a final accord could come within a month, after a few remaining issues are settled.
"Once we get that in place, I suspect other Magna factories will take a good look at joining the union," Mitic said.
The partial agreement includes traditional features of union contracts, with seniority and job assignment rules, health and safety programs, and a grievance procedure, Mitic said. It also includes innovations that "respect Magna's culture," including provisions that tie part of pay to the company's performance.
Magna intends to meet with the UAW in a few weeks to see if it's interested in a similar agreement, Amos said.
Magna, which reports in U.S. dollars, had sales of about $9.3 billion last year. It's the only company other than one of the automakers capable of building tens of thousands of vehicles. In Ontario, it makes frames for General Motors Corp. by using high-pressure water to shape steel tubes, saving weight and cost.
Magna attributes its growth in part to a "charter of rights" that guarantees regular meetings between workers and bosses, plus "fairness committees" and an anonymous hot line for worker complaints. Chairman Frank Stronach makes no secret of his preference for union-free plants. "Let the unions buy a factory ... and run it exactly as they wish," he said in a recent interview.
Mitic attributed Magna's willingness to talk to the CAW now in part to pressure from its big customers, including DaimlerChrysler. The CAW threatened to call a strike at DaimlerChrysler last fall unless the automaker pressured Magna to be less hostile to union organizers. Prior to the union vote in Windsor, DaimlerChrysler asked Magna to let workers decide on the union in an atmosphere free from intimidation.