The Uaw To Daimler: Thanks For The Bargaining Chip

The auto workers take on the carmaker's nonunion plants

Subtle, it's not. Drivers along Interstate 20/59 in Vance, Ala., can't help but notice a billboard that went up last month depicting a smiling Stephen P. Yokich, president of the United Auto Workers and newly elected member of the DaimlerChrysler board. Aimed at workers heading for a nearby Mercedes-Benz factory, the billboard has a simple message: The UAW wants to be their bargaining representative. It even offers a toll-free number: 1-800-2-GET-UAW.

The UAW has eyed the Mercedes plant since its German parent, Daimler Benz, first announced construction plans in 1993. But the union did little until Daimler Benz merged with Chrysler Corp. last year. Now, UAW officials figure the merger gives them new leverage.

Why? Because the UAW, hoping to stop its 20-year membership slide, plans to make organizing such nonunion plants a major topic when national contract talks with Ford, General Motors, and DaimlerChrysler begin this summer. A key demand will be that carmakers tell their subsidiaries and their suppliers to remain neutral when the union attempts to organize them. Otherwise, they could face a nationwide shutdown. The first test is going to be the Mercedes plant and another DaimlerChrysler factory in Gastonia, N.C., which builds Freightliner truck parts. If the subsidiaries fight back there, the UAW is threatening to strike Chrysler.

On Apr. 27, the UAW drove home its threat by bringing several hundred union officials to nearby Birmingham, Ala., to hammer out demands for a new labor pact at Chrysler. At the meeting, insiders say, leaders called for a strike by Chrysler's 76,000 UAW members in September if Mercedes and Freightliner managers oppose the recruitment drive. During the trip to Alabama, Daimler Director Yokich arranged to tour the plant at Vance, where Mercedes makes M-class sport-utility vehicles. Although the UAW president is saying nothing, the message is clear. "He didn't come for a social call," says Mercedes plant CEO William Taylor. "He came to make his intentions known, and I respect that."

HOSTILE. A UAW shutdown would be disastrous for DaimlerChrysler, which derived more than half its 1998 profits from Chrysler's popular cars, trucks, and minivans. Thomas P. Stallkamp, president of the company's Chrysler operations, says he and other top U.S. executives have asked their German counterparts to make sure Mercedes and Freightliner managers don't interfere. He's reminding them "that they're part of a bigger entity," says Stallkamp.

What makes unionizing Mercedes so difficult? Like many other transplants, Mercedes chose a rural economy and right-to-work state for its new plant. Here, employees are often hostile to unions and grateful to receive auto worker pay--sometimes as much as double local wages. Mercedes workers in Vance, for instance, earn $20 an hour, plus generous benefits. So, they're unlikely to join a union if management discourages them.

Still, some workers were unhappy enough to go to the union for help last fall. One beef: Management was forcing workers to accept mandatory overtime by speeding up the assembly line from 138 Mercedes SUVs per shift to 188.

For now, both sides appear to be on good behavior. After a top UAW official recently blasted Mercedes for being antiunion, union leaders quickly retreated, telling the company that he was misquoted. Meanwhile, Freightliner President James Hebe softened his antiunion rhetoric. After advising workers in an Apr. 9 letter to resist the union, Hebe said in an Apr. 19 missive: "We will respect our parent company's policy of a neutral position...."

Of course, even if management remains neutral, the UAW faces a tough battle persuading employees who were handpicked by management to embrace the union. Mercedes body-shop worker Eugene Price thinks most of his co-workers are happy. "I believe they're wasting their time," he says of the UAW. Perhaps, but the union may have a better shot now than it ever did.