Labor Pains Bedevil Emanuel in His Chicago Bid to Replace Daley

Rahm Emanuel’s relationship with unions can make even the simplest question difficult: Is the former White House chief of staff and Chicago mayoral candidate a friend of labor?

“I’d rather not comment on that,” said Tom Balanoff, president of the Illinois State Council of the Service Employees International Union, the state’s largest. That depends, he said, on “how you define a friend.”

Winning labor support is central to Emanuel’s political ambitions in a city where nine out of 10 municipal employees are union members. About 250,000 of the third-largest U.S. city’s 2.8 million residents belong to unions, said Nick Kaleba, a spokesman for the Chicago Federation of Labor.

Yet Emanuel may have to target public workers for firings or benefit reductions because Chicago faces escalating employee costs that comprise 83 percent of its $3.26 billion general fund. The city’s repeated tapping of reserve funds to balance its budget led Standard & Poor’s to cut Chicago’s credit rating on Nov. 5 by one level to A+, the fifth highest grade.

Emanuel called for “shared sacrifice” by government workers when questioned at a Nov. 19 news conference where he accepted the endorsements of the local plumbers and pipe-fitters unions.

Photographer: John Gress/Getty Images

Former White House Chief of Staff Rahm Emanuel signs a Chicago Police Officer's sleeve while campaigning for Chicago mayor. Close

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Photographer: John Gress/Getty Images

Former White House Chief of Staff Rahm Emanuel signs a Chicago Police Officer's sleeve while campaigning for Chicago mayor.

“It’s not just one side taking it on the chin,” he said. “We’re going to have to make tough choices.”

Labor Skeptics

Neither of those locals is among the largest unions representing city workers, which have said they may not endorse a candidate before the Feb. 22 election.

Labor’s distrust of Emanuel dates to his role in helping President Bill Clinton get the union-opposed North American Free Trade Agreement passed.

Those tensions re-emerged during the U.S. government’s 2009 efforts to boost the automotive industry and deal with the United Auto Workers union.

“(Expletive) the UAW,” Emanuel, then President Barack Obama’s top aide, said during a White House meeting according to an account in the book “Overhaul” by Steven Rattner, the former head of the automotive task force.

Asked at the news conference if Rattner quoted him accurately, Emanuel said: “Yeah, and as you remember, the UAW the next day, the president sent out a statement praising me for the leadership of working by President Obama’s side to help make the changes that were necessary.”

Friend or Foe

Such episodes leave some Chicago union leaders in Emanuel’s hometown wondering if the former congressman from Illinois would be a friend or foe.

“Rahm has had some clashes with labor,” said Balanoff, whose 170,000-member union includes about 100,000 in Chicago. “On the other hand, Rahm has helped move a lot of legislation that labor has supported.”

Emanuel, 50, is seeking to replace retiring Mayor Richard M. Daley. Other candidates include U.S. Representative Danny Davis; Illinois state Senator James Meeks, minister of one of Chicago’s largest churches; City Clerk Miguel del Valle; former Chicago school board president Gery Chico; and former U.S. senator and New Zealand Ambassador Carol Moseley Braun.

Emanuel has lined up backing from executives of major Chicago-area companies. A Nov. 15 fundraiser for him was co- hosted by Glenn Tilton, United Continental Holdings Inc. chairman, and Miles White, chief executive officer of Abbott Laboratories, among others.

Unionized Workers

Illinois had a larger percentage of unionized workers -- 17.5 percent -- than the national average of 12.3 percent in 2009, according to data from the Bureau of Labor Statistics.

Most union members in Illinois live in Chicago, where an April 5 runoff will be held if no candidate gets more than 50 percent in the February election.

Daley, 68, said Sept. 7 that he wouldn’t seek re-election to a seventh term. The City Council on Nov. 17 passed his 2011 budget of $6.15 billion, closing a $654 million deficit in part by asking union workers to join non-union employees in taking furlough days.

The labor challenge that Emanuel faces became clear two days after Daley announced his retirement. A blog sponsored by Balanoff’s union ran a posting entitled “The Case Against Rahm.” It spotlighted his brushes with labor, spanning from his role in helping pass Nafta in 1993 to his comment last year about the UAW.

“Progress Illinois does function independently of us,” Balanoff said when asked if the blog entry reflected his union’s position on Emanuel’s run for mayor. “They raised issues that people are concerned about.”

Doubts on Privatization

Emanuel, who resigned his White House post Oct. 1, recently expressed reservations about the Daley administration’s long- stalled plans for leasing Chicago’s Midway Airport to a private company. That drew the admiration of labor leaders.

“Privatization was oversold and overdone under the current administration,” said Henry Bayer, executive director of the Chicago council of the American Federation of State, County and Municipal Employees.

Emanuel also has said he would review the city’s garbage- collection system in a process that could end in at least partial privatization.

“A lot of people will act one way when they are a legislator and a different way when they get into the executive branch,” Bayer said. “So the question really is going to be what’s the thrust of his policies as mayor.”

Animosity Lingers

Whoever wins the election will face lingering animosity. Chicago police officers worked almost three years without a contract before securing one in April. At one point during the dispute, about 4,000 officers marched around City Hall chanting, “Daley sucks.”

Emanuel’s labor quarrels were mostly before and after he represented parts of Chicago’s north side and northwest suburbs in Congress. During his six years as a lawmaker he compiled a voting record that the AFL-CIO, the world’s largest labor federation, ranked as 95 percent supportive of its positions.

“In the context of that, we would say, ‘That’s our friend,’” Balanoff said.

Emanuel is now reaching out to labor. One of his first campaign stops, before formally announcing his candidacy, was at a Ford Motor Co. assembly plant in Chicago, home to United Auto Workers Local 551.

“I didn’t know about that comment,” Carlo Bishop, the union’s president, said when asked if anyone questioned Emanuel about his slur of the union. Bishop said the brief visit included no substantial conversation about labor issues.

Daley Ties

Emanuel worked with William Daley, then special counsel to the president, to get Nafta passed. Daley, a younger brother of the mayor and one of Emanuel’s mentors, is now Midwest chairman for JPMorgan Chase & Co.

“A lot of us were not very happy about the role he played in Nafta,” Bayer said.

Emanuel also clashed with labor during the debate over the health-care overhaul when he was Obama’s chief of staff.

To try to boost his credentials, Emanuel’s campaign plans to hold an event featuring Labor Secretary Hilda Solis, who has strong union ties.

Brian Rainville, executive director of the Teamsters union in Chicago, said he expects his membership will be more concerned about what Emanuel will do in the future.

“If Rahm becomes the mayor, he’s not going to be negotiating with other nations on trade issues,” he said. “You can’t let the past be an obstacle to the future.”

To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net.

To contact the editor responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net.

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