In the latest development in the ongoing organized labor wars, GM announced the nomination of UAW Vice President Joe Ashton to its board of directors as the representative for the VEBA healthcare trust for retired GM workers. The news, which the GM board “fully supports,” according to a spokesperson, came in a filing with the U.S. Securities and Exchange Commission. Ashton takes former GM senior executive Steve Girsky’s place representing the trust on the board.
The VEBA, or voluntary employees’ beneficiary association, received GM stock in the company’s bankruptcy restructuring during 2009, and procured a seat on the board at that time. As of 25 April 2014 there were 1,603,739,863 shares of GM common stock outstanding. The VEBA owns 140 million shares of GM common, roughly 8.7% of outstanding shares. This gives the VEBA a strong voice about GM governance and policy.
The move comes after radical Tennessee Republican politicians – notably Governor Haslam and Senator Corker – actively opposed the establishment of a works council, which would require union representation in the anti-union South at a Volkswagen plant in their state. The plant in question remains the only VW plant in the world without a works council. Moreover, VW has apparently put a planned big expansion in Tennessee on hold as a result of the anti-union vote, which is being contested. The high paying jobs with great benefits could now go to a unionized VW plant in Mexico because of what I view as senseless Republican political ideology that hurts the people they represent. (Read: Did Tennessee Governor Haslam Violate Worker’s Rights? Memo: Some readers objected to my “radical “characterization after this was posted – see comments on this story – KZ)
The likely UAW board appointment also sends a message to Republican Michigan Governor Rick Snyder. His reelection this fall will be vigorously contested by progressive forces, including the UAW, after he taxed middle class retirement pensions while cutting taxes on the super rich, and established Michigan as a “right to work to state,” blatant reversals of his gubernatorial campaign promises, among other Snyder deceptions, that saw him get elected, barely, four years ago.
The UAW’s Ashton plans to retire from his current position in June following the UAW constitutional convention. If elected, and it’s virtually certain, he will begin his board term in August. He joined the UAW in 1969, and has been a member of the UAW International staff since 1986 serving in a variety of roles. Active in labor and civic affairs, he is executive vice president of the Pennsylvania AFL-CIO Executive Council, executive vice president of the New Jersey AFL-CIO and a former director of the Western New York Federal Reserve Bank. This also raises the question, once again, if the UAW should merger with other AFL-CIO unions, the likely candidates being the Teamsters or the Steelworkers.
“Joe brings a wealth of knowledge from his work across many industries, especially his deep understanding how labor strategy can contribute to a company’s success,” said GM Chairman Tim Solso.
During the annual meeting on 30 June at the Renaissance Center in Detroit, stockholders will be asked to re-elect GM’s incumbent directors, ratify Deloitte & Touche as the company’s public accounting firm for 2014, vote on an advisory resolution on executive compensation and the frequency of future advisory votes on executive compensation, approve short- and long-term executive incentive plans and vote on two stockholder proposals.
CEO Mary Barra can get $14.4 million for meeting 2014 performance goals, almost tripling her 2013 pay. Former CEO Akerson received more than $9 million last year. (Mary Barra to become GM CEO when Dan Akerson Retires)
Steve Girsky, former vice chairman, is also nominated to remain a director. From March 2010 to January 2014, Girsky served as GM Vice Chairman and was responsible for global corporate strategy, new business development, global product planning and program management, global connected consumer/OnStar and GM Ventures LLC and global research and development. He also served as Chairman of the Adam Opel AG Supervisory Board. Girsky also oversaw Global Purchasing and Supply Chain from 2011 to 2013. Girsky led GM’s thus far failed turnaround plan for Europe that has put that region’s operations back on a path to profitability. (Switched Off! GM Q1 Earnings Plummet to $100 Million)
The election of the board’s slate of nominees would bring GM’s Board of Directors to 12 members, 10 of whom are non-employee directors.
The best work on this subject is by Rogers and Streek: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations (National Bureau of Economic Research Comparative Labor Markets Series) (U. Chicago Press). Not sure if it’s available on-line, and my cursory search hasn’t found more than a few truncated entries. But if you want a look (a liberal look, mind you) at the history of the Works Council movement both overseas and here, this is the book. It is very disheartening regarding the US (last chapter in the book), and goes into some detail as to the politics of why works councils are specifically prohibited. The short version is the right doesn’t like them as they think it is a sneaky way for a union to start in the workplace, and the left doesn’t like them because unions want to control them – and if they can’t control them they must be banned.
It’s the ‘company union’ rule which is archaic and insane – and has been the subject of discussion quite a bit. The folks most vehemently opposed to allowing them are, as one can imagine, the national unions themselves. It is really a power and money issue as much as anything, although opposing philosophies about class and culture play a large part.
Bill Cawthon, Associate Editor at Acarplace.com: Actually, that’s not quite true. The National Labor Relations Board has said that works councils in the absence of a recognized union are illegal as they constitute a company union which is prohibited.
Workers at the VW Chattanooga plant are free to organize their own union or select another to represent them. That would satisfy the requirements of the law.
Oddly enough, one of the best examples of cooperative relationship between unions and management was the original Saturn plant in Spring Hill, Tennessee. Both GM management and the United Auto Workers were very proud of their record of working together.
The anomaly in all this is the Republicans like Haslam and Corker railing on and on about the union when the Spring Hill plant is still in operation and still union. Has been since the day it opened.
BTW: The National Labor Relations Act, also known as the Wagner Act, was passed in 1935, not 1934. It was, as Charles noted, a Democrat creation: the Republicans fought it bitterly, just as they do today.
Charles Moseley: Bill is also right about 1935, not 1934. But there was a LOT of bitching about this in ’34. It has been argued (powerfully, in my opinion) that FDR and the Democrats actually saved the United States from serious upheaval with this bill. It is easy to forget now in 2014 how powerful a lure Communism was back then. Few people knew about Stalin’s terror campaigns or the inherent societal impossibilities of Communism in those days. Passage of this bill was a bit of a palatine to that movement.
Charles Moseley: One can trace this legal discussion back much further as well – there are some interesting Supreme Court decisions regarding workers rights going much, much further back.
Ken – If you wish to be taken seriously, you might drop “radical” from describing politicians with a different point of view. It’s not clear to me that a UAW organized workforce is essential for a works council model. Is the UAW active in Mexico? Didn’t the Japanese automaker transplants include worker/management cooperation?
KZ: Wild card here is the German Metalworkers union in the background. It has been claimed that a union is necessary to have a works council because there would be no way to enforce a works council decision made in conjunction with the VW Group. I do find the actions and prevarications by the Governor and Senator to be radical in the context. Yes, the Mexican plant is organized but not by the UAW and has gone through a couple of contentious strikes that resulted in huge pay raises.
BD: I’m familiar with the European automaker’s model and the reason why VW took UAW’s side in the election. But in all the years of witnessing UAW policies, including direct involvement, I’m not sure they’re the only or the best solution to labor/management cooperation. When Nissan managers first came to the USA to look at manufacturing here, they were planning on engaging a labor union, since that’s what they had in Japan. But the UAW made it pretty clear that the relationship would hardly be cooperative. Of course things have changed over the decades, but it’s still a world economy and from my point of view, Michigan’s right-to-work move should help the state attract automotive business. And if the UAW has a better deal for workers, let them sell it!