UAW wants Nissan in Mississippi. Civil Rights: What?

You gotta be kidding me, the UAW says unionization is akin to civil rights. I might make a reverse argument, but that’s not for this forum. As Bob King targets Nissan’s Mississippi plant as the “do or die” target a lot of data is being thrown around, and I agree with one thing King has said: “Fear and intimidation should not be part of the equation,” and that counts for both sides. The UAW aggressively make its case, the company can as well and let these adults make a fair and private decision in a fair and private process. Let’s take a look at some of the variables that have been posed:

Race: Canton/Jackson is a predominately African-American community, 79.4% of population. How and why would the UAW expect Nissan to have a workforce that differs substantially. Smyrna and Murphreesboro is more in line with national average with 15% African-American, Nissan does not disclose the breakdown of the Smyrna Decherd workforce, but it is likely inline with local population trends. Frankly I find this argument juvenile and offensive the real issues of 1) race an 2) real accomplishments of labor in the US.

Pay: Evidently, the UAW is aghast that the average pay at Canton in around$1.50 lower than Nissan’s Smyrna plant. Is that good bad or indifferent:

The median home price in Canton Jackson is $90K while it’s closer to $160K in the Smryna/Murphreesboro area.

Canton workers make around $25/hour. That’s $50k per year excluding benefits and overtime options (which they would lose in any UAW scenario.) It’s also 66% higher than the Mississippi state average for industrial workers, and double the statewide average of $19k per capita — no small note in a state with a strong shipbuilding contingent to the south.

Work conditions: Smyrna has been in operation since 1982, meaning even the entry-level workers have more longevity, and more importantly, they’ve had more time to diversify their work skills, meaning they can opt to train on more than one task, allowing them to qualify for more overtime and work for advancement — making them more valuable.

The Tennessee plant is in suburban Nashville, which is a burgeoning southern metro area, home to multiple international companies like Dell, Bridgestone NA and Electrolux NA. With the competitive labor situation, I’m aghast the wage differential isn’t bigger.

Future of the plant: Nissan’s 2001-2002 investment in Canton opened the door for tens of thousands of families to have better jobs, and laid the foundation for additional auto investment in the state including Toyota’s new facility near Tupelo. At the time it was announced, the Canton plant was the biggest investment in Mississippi since reconstruction.

Track records: Well, for one, Nissan has never laid off a production worker in the US. Not during the companies financial crisis of 1999, when it teetered on the precipice of bankruptcy. Not post 9/11 when the auto market crashed, nor most recently post housing bubble collapse when the market nearly halved in the US.

On the contrary, the company has increased localization in the US, moving existing and new products to the US, often to the loss of home country production in Japan (such as the Maxima or the Pathfinder). High productivity and flexible workers have made the US a great place to build cars and Tennessee and Mississippi a great place to be a car worker.

I’ll let you readers draw your own conclusion on the job creation ability of the UAW. I will give you one stat: members in 1979; 1.5 million, membership in 2009; 380,000. At the same time non UAW autoworkers number around 400,000. The labor market has voted and as you can see, Tennessee has become a new established center for auto production with three OEM’s anchored by Nissan and more than 900 suppliers employing tens of thousands of American autoworkers — some union, most not — who have made a free choice to live and work there.

One word of caution. The Canton plant currently builds a couple of products I expect to see discontinued. The Armada and Titan will finish production except in their newly minted LCV roles. The Xterra will move there for the short remainder of its life (expect it to fall out in 2013-14) and the Frontier will be remaining truck. Canton’s 5,000 direct and indirect employees can look for continued product feed as long as they remain competitive with Smyrna up the road. Smyrna can be scaled easily and quickly. And with Nissan expanding capacity for EV — and I fully expect that capacity to be open as the Leaf falls short of company expectations — there will be room for ongoing shift back up the road to the north.

Also, Canton employees need to realize that the company is expanding in Mexico to meet demand in North and South America. In fact Nissan managed its operations on an “America’s” basis, not just US operations. The history has been that as long as you are flexible, the company will let you work as much as you want (relatively) and is highly unlikely to lay you off. Not a bad deal in today’s environment. One good question is whether UAW strike pay is better or worse than what Nissan has paid in past work shortages?

Full disclosure: As a former Nissan white-collar guy (who has no connections to the company for three years) I can personally attest to the fact that the manufacturing arm offers preferential treatment to its employees than the corporate or sales arms.

COMMENT: This vote is Nissan’s to lose. I don’t see how they can lose it, short of really screwing up the relationship with employees. I’m not an expert on UAW, so I can’t say as if I agree that failure to win the vote will sound a death knell. As for impact on Nissan if they vote goes to the UAW, it will definitely take away the manufacturing flexibility that has allowed them to be very responsive as the market has been shifting, pressuring already squeezed margins in the US.

There’s been a lot of stress on US workers over the past few years, but the numbers are pretty clear. To the ladies and gentlemen in Canton, look at the numbers.

The UAW has a lot to accomplish in finding stability in the bailout they received from US taxpayers. With more than 1 million retirees, they need to work with the VEBA trusts, and with GM and Chrysler management to ensure that both of the companies can grow their value and pay out their responsibilities to retirees.


3 thoughts on “UAW wants Nissan in Mississippi. Civil Rights: What?

  1. First let me explain, I am not well educated but I do have a high school education. I don’t claim to be smart. I do know that Canton is in Mississippi which is abbreviated MS not MI. Please get you facts straight first.

    • Doug. Point taken. I learned that well before High School — including the famous state spelling. Frankly, the hardest name for me is Murphreesboro and I have family there. Hope you agree with the rest of the facts I tried to share. I highly recommend the federal census figures, I gave you links. Having lived from the farmlands of Nebraska (NE) to some big cities, it still amazes me what a hugely diverse country we live in. Understanding an respecting this diversity is important.

  2. With family in Murfreesboro Tennessee, one would think you would know how to spell it.
    Looks like your still having trouble with it!!

    Yep I do. It kills me that in TN it’s with an f and in MS it’s “ph”. Both are great places. But I’m glad you agree on the difference in cost of living.

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