Striking unions

July 28th, 2011
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We trust that readers have received all the mail they think was delayed by the Canada Post strike. There was a strike wasn’t there?

Lingering holidays have delayed me posting some interesting comments on public sector unions by friend-of-the-blog Rick B. Rick was a CAW shop steward and later a manager for a large multi-national, with a plant in south-western Ontario.

His first point is, in a sense, political. He notes Ann Coulter’s point that unions need an antagonist. Because public sector unions typically bargain with disinterested bureaucrats, who have no stake in the bargain being reached, the political arm of government can’t help but be drawn in is as the bad boy.

Secondly, he maintains that public unions’ job actions are of course not directed merely at abstract government. The public is increasingly aware that the union is withholding services from them, the tax-payer. Remarkably, this narrative was actually acknowledged by some media in the recent Canada Post strike, where it was stated that the union was calculating how long it could strike before it would draw the ire of the public. It’s worth noting that this apparently wasn’t a consideration in past decades, like the 1970′s, when CUPW was much more militant.

Rick’s third, and most important, point is that negotiating public service unions really have nothing to lose.  His experience with union bargaining suggests that, in the private-sector, unions more often consider the bigger picture. They have to decide whether the company can afford the demands, or will it fold, close the plant, move production to another plant or country. Public-sector unions don’t take that risk. Transit commissions and other public groups routinely “budget” by allowing a strike and saving money that way, before giving away the farm.  The mail-delivery, grass-cutting, garbage pickup, etc., will be there when the strike is over – and even some overtime to catch up!  In Rick’s opinion, Canada Post forced the government’s hand this time because there was a good chance the mail delivery was no longer going to be there when the strike ended. He thinks that public attitudes had reached a critical point and Canada Post – but not CUPW – was smart enough to see it.

Not that there is perfection in the private sector and its unions. Belligerent unions can cause companies to dig in and sacrifice their apparent economic interests to combat the union.

Rick gives the example of Ford, that owned the North American police-car and taxicab market, with production at their St. Thomas plant of the Crown Victoria, Grand Marquis and Lincoln Town Car. Economic self-interest would say, “keep making your 35-year-old design, with all of the flaws ironed out or automated out, and never re-open the door to competition”. Instead, Ford decided to close the plant and re-compete with GM, Chrysler and the Japanese manufacturers with new models.

The reason?  Rick cites that the St. Thomas plant was oldish and, from what he knew an “HR hellhole”, a “nightmare” that made money and won JD Powers awards only because of the automation and the repetitive design.  Ford felt no allegiance to or affection for the plant, but were apparently all too happy to jettison the unionized employees.

I agree with Rick’s contention that we need associations of employees in the private sector.  It helps with rules, pay schedules, job content, etc.  But public sector unions are not real unions in that sense, and they shouldn’t bargain until they have to take some risk in doing so.

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By John Weissenberger