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CPBJ Extra Blog

Are unions good for manufacturing?

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Read a couple of great stories this week about two manufacturing giants with different views on jobs and unions.

First, the New York Times ran a story on the Harley-Davidson plant in Springettsbury Township, York County. As the story recounted, the company looked to its union as a partner in remaking the plant in the face of the economic recession.

Company officials said keeping jobs in the U.S. and working with the International Association of Machinists and United Steelworkers was crucial to Harley's blue-collar image. The highly trained workers continue to produce the best-quality motorcycles on the market, officials told the newspaper.

So the high-paying jobs remain, but there are fewer of them. Harley has laid off about half its workforce, which numbered more than 2,000 five years ago.

Times remain tough, but the New York Times' article lauds the company for limiting the use of robots and declining to employ union-busting tactics.

Then you have Nissan. The Washington Post visited a Nissan plant in Smyrna, Tenn., for a story on "the new manufacturing industry." The story describes how the automaker opened its plant in 1983 and spurred a population explosion that saw Smyrna grow fivefold to 41,000 residents.

Unfortunately, the good times did not last. After Nissan flirted with bankruptcy in 2001, the company took steps to lower production costs. First, it started hiring temp workers for office-level positions. Two buyouts in 2007 and 2008 reduced the workforce by a third.

When demand returned, and worker turnover permitted, the company began filling manufacturing positions through temp agencies, the Post reported. If true (Nissan declined comment), the company is following a nationwide trend.

Federal Bureau of Labor Statistics show a sharp increase of temp workers in manufacturing since 2009, up to 21 percent nationwide. In Tennessee, that figure swelled to 26 percent from 15 percent.

From the company's standpoint, the advantages are obvious: Temp workers earn far less in wages and benefits. The soft labor market is largely responsible for the rising pool of temp workers.

The Nissan workers have twice rejected representation by the United Auto Workers. In both cases, Nissan vigorously lobbied against the union, the Post story said.

So far, the widespread use of temp workers has not derailed productivity. Manufacturing sector productivity increased 1.3 percent in the fourth quarter of 2013, the BLS reports, as output increased 5 percent and hours worked increased 3.6 percent.

But common sense tells me a recovering economy, and a thriving economy, needs a manufacturing base of happy, trained workers making good wages. After all, when those workers leave the plant, they become customers.

For the time being, Nissan remains a strong employer in Tennessee, helping Rutherford County (home to Smyrna) boast one of the lowest unemployment rates in the South.

So, to sum up, Harley maintained high-quality, union jobs, but far fewer of them, while Nissan workers lost pay and benefits, but the jobs remained.

Which is the better option?

The answer might not be known for several years.

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