Last July, members of Local 1101 of the International Assn. of Machinists and Aerospace Workers (IAM) marched into a dealership showroom in northern California.

Bullhorn in hand, the district director threatened a strike. The dealer told him to go ahead. The technicians filed outside and began picketing.

The dealer agreed to begin negotiations a few minutes later.

It's a tactic, known as marching, that unions typically use to intimidate dealers into not trying to stymie technicians seeking to form a union local. In this case, the dealership was already unionized when the dealer acquired it. He was refusing to honor the current contract, according to union officials.

The union got its contract, but the results were less than satisfactory for it — as they were for the dealer.

For many business owners, “union” is a dirty word. For dealers, many whose businesses have been family owned for years, the prospect of a union shop is disheartening.

“The union wants to erode the dealer's right to manage his business,” contends James Hendricks Jr., a partner at the Chicago law firm of Fisher & Phillips. It represents many dealerships in labor relations.

Union activity inside the dealership can have long-lasting effects. Relationships between the dealer and employees are often strained. The service department can become a poisonous environment.

It's certainly an emotional blow,” says a dealer whose employees went on strike last year. “I watched as employees of 30 years picketed outside.”

Charley Smith, incoming chairman for the National Automobile Dealers Assn., says the issue is on his radar screen, although NADA doesn't yet have an official program to assist dealers facing union issues.

More and more dealers face them, often involving service technicians.

Unions, specifically the IAM, have ratcheted their organizing activities at dealerships. That includes attempts at organizing stores and staging strikes at stores already unionized.

“Work stoppages don't happen that often, but it's always a potential for the dealer who has a union in the store,” says Hendricks.

Until last July, there had not been a strike in a dealership in northern California since 1986. Then about 300 technicians at 10 dealerships in Contra Costa County, CA spent 24 days on the picket line, mainly because of health insurance issues. They ultimately signed a new contract

As those technicians returned to work, 13 technicians from nearby Serramonte Dodge, owned by Sonic Automotive Inc., struck. A contract was settled 97 days later.

In Philadelphia, Fairway Automotive Group employees, represented by Local 500 of the International Brotherhood of Teamsters, staged a strike for almost six months. There was a strike at a Lansing, MI dealership in July.

In addition to the strikes, there have been high-profile attempts by the IAM to get into dealerships such as a recent effort to unionize technicians at AutoNation Inc.-owned Payton-Wright Ford in Grapevine, TX. A petition for a vote was filed but pulled in December when organizers realized they lacked enough votes.

Similar attempts have been made in southern California with the same results. Only one made it to vote, however. Technicians at Citrus Ford voted against the union in early December.

In Michigan, employees at two dealerships, Cole Story Ford and Jackson Ford, voted for the union, also in December. The IAM also was successful in five other dealerships around the country in 2003.

Why the flare up of union activity? There are several reasons. First is a problem frustrating most companies today: the issue of escalating health care costs.

“In the last two years, in virtually every case of union activity, health insurance has been the driving issue,” says Hendricks.

It's one thing union and management agree on.

“The cost of health care is skyrocketing,” says Jesse Juarez, organizer for Local 190 of the IAM. “The employers have valid issues and I understand that, but they try to shift cost to the employee and we won't stand for that.”

Other hot buttons are retirement pensions and wages that are less than workers want.

Other dynamics are at play. One is an organized labor effort to replenish ranks in the face of declining membership at unions such as the IAM. Union membership has declined sharply in recent years, especially as manufacturing jobs move overseas.

The IAM, to stem some of its rank-and-file losses, has turned attention to the service departments in dealerships. They've been trying to organize dealerships for years, but with little success.

The union employed a method commonly known as “blitzing.” Union organizers hit a city and hand out pamphlets by the thousands to technicians, inviting them to an organizing meeting. The meetings have never generated enough interest to tip the scales. Stories of such efforts and examples of the pamphlets can be found on the IAM web site.

The Teamsters, who declined to be interviewed, have all but given up on organizing dealerships. Although, the union still is strong in certain regions (the Teamsters have a presence in northern California and represented 250 of the 300 technicians who went on strike there), it considers efforts to unionize dealerships as a waste of money and resources in light of the small number of new members it might create, according to industry observers.

Meanwhile, the IAM is revamping its strategy, say local organizers.

The change stems from a relationship the IAM formed with some Ford technicians last fall.

The technicians are frustrated by Ford Motor Co. adjustments in labor time rates for warranty work.

The technicians have a web site (www.flatratetech.com) on which they complain of the changes and encourage technicians to consider unionizing. The web site has made it easier for other technicians and union organizers to keep in touch and track events.

The web site's creators — Mark Ward, his father Dick Ward, Jeff Colgrave and Dan Young — met with the IAM's leadership in Las Vegas and Washington D.C. last fall.

They cut a deal with the IAM to recruit and provide leads for potential union shops. In return, the IAM is handling a class-action lawsuit the technicians want to file against Ford to force the auto maker to reinstate the original labor rates.

Mark Ward and Colgrave say the deal was a move to force Ford dealers to support their efforts and lobby the auto maker to rescind the labor time cuts.

The technicians appear to have fired up the automotive division of the IAM. Ward, a senior master technician for a Ford dealership in Eufala, OK, remembers thinking after the meeting in Washington, “These guys couldn't organize a Tupperware party.”

He's not impressed with the “blitzing” strategy. “It just doesn't work with technicians. The machinists (IAM) need to get more aggressive.”

Ward, who spends much of his spare time managing the flatratetech web site, says he doesn't go into dealerships trying to organize. “We'll get a phone call, then we'll set up a meeting or two to educate the guys and see if it's something they really want to do.”

Only when there is enough support is when Ward gets aggressive. Often, it begins with a march on the dealership that includes technicians from that dealership, union organizers and other union members.

Juarez, a former technician, has used similar methods in California. “When we march, we try to force the dealer to accept the union on the spot — which they never do. We'll then file a petition with the National Relations Labor Board to set up a vote.”

IAM's automotive division met in mid-January to adopt flatratetech's style of aggressive organizing, according to Ward.

He says he has several technicians in the Dallas area ready to march on their dealerships. They include both Sonic and AutoNation stores.

“There's a race to become the first dealership in Texas to unionize,” says Ward. The IAM also is beginning to look at Florida as the next battlefront. “We're getting emails and phone calls all the time from technicians in that state,” he says.

So what recourse is there for a dealer who finds the union in his or her store with technicians demanding to organize?

It's best to be proactive and remove the reasons technicians may want to organize. “It's real simple,” says Hendricks. “It's knowing what the competition is selling. It's what we call union avoidance.

“The union will come in every time and say, ‘Here is our contract.’ We know what the union is offering — what the flat rate is; what type of insurance coverage it promises and we know the type of retirement plans.

“If you know the union shops in your area are paying its techs a higher flat rate, then you'd better be paying that same rate to your techs.”

Once a union is in a dealership, the dealer is subject to a work stoppage.

“If that happens, your customers will end up at the competition,” Hendricks warns.

Despite the health insurance, pension fund and wage issues, much of the technicians' ire is driven by what's reportedly perceived as a lack of respect from dealers.

“All these techs really want is for someone to stroke their backs and make them feel good and important,” Colgrave admits.

Jerry Reynolds, owner of three dealerships, including Prestige Ford in Garland, TX, says dealers need to know their technicians and treat them as valued employees. He's been providing his technicians with a 401k retirement plan.

“Dealers have got to get to know their technicians,” he says. “There has to be open and honest dialogue.”

Reynolds thinks there is too much segregation between the sales and service departments in many stores. “Dealers had better figure it out,” he says. “Our technicians are good people, and they're not stupid. And they make us a lot of money.”

Rob Gregory, owner of Rochester (MN) Ford Toyota says he goes out of his way to maintain good relationships with technicians and make them feel an important part of the team. Regardless, some of his technicians still wanted union representation, largely because of Ford cutting the warranty work rates.

Gregory says it's hard not to take it personally. In December, a majority of the store's technicians voted against unionizing.

Some dealers apparently need basic training on how to keep the troops happy.

Hendricks recalls assisting a Wisconsin dealer whose technicians were trying to unionize. “He called me the day before the scheduled vote and said, ‘I can't win this thing tomorrow.’”

The dealer had been walking through his service department to go to his office, when a technician approached him and asked, “You really don't know what this is about, do you?”

The dealer admitted he didn't. He also didn't know anything about his technicians, their names, families or interests.

Every day he would park his car in the back of the building and walk through the service department. He never stopped to say hello or chat with his technicians.

They grew to resent him because of that.

The union was voted in. A year later, the dealer improved at how he interact with his staff, says Hendricks.

The technicians subsequently voted the union out.

Union Dealership Activity in 2003

Power Ford Tustin, Tustin, CA —
Petition pulled (IAM)

Power Ford Huntington Beach, Huntington Beach, CA —
Petition pulled (IAM)

Villa Ford, Orange, CA —
Petition pulled (IAM)

Payton Wright Ford, Grapevine TX —
Petition pulled (IAM)

Citrus Ford, Ontario, CA —
Voted against the union (IAM)

Rochester Ford Toyota, Rochester, MN —
Voted against the union (IAM)

Jackson Ford, Jackson, MI —
Voted for the union (IAM)

Cole Story Ford, Coldwater, MI —
Voted for the union (IAM)

Camp Chevrolet-Cadillac, Spokane, WA —
Voted for the union (IAM)

Mike Haggerty Volkswagen, Oak Lawn, IL —
Voted for the union (IAM)

Geweke Ford, Yuba City, CA —
Voted for the union (IAM)

Import Auto, St. Louis, MO —
Voted for the union (IAM)

Davis Toyota, Pittsburgh, PA —
Voted for the union (IAM)

Landmark Chrysler, St. Louis, MO —
Voted for the union (Teamsters)

Ford Dealers Caught in the Crossfire

Ford dealers are caught in the middle of a dispute between their technicians and Ford Motor Co.

Ford technicians are angry about labor time rates that Ford cut in 1997 and 1998. Ford pays dealers and technicians a flat rate for warranty repairs. Technicians say that Ford, in setting unrealistic labor times, is taking money out of their pockets.

Technicians Mark Ward, Jeff Colgrave, Dan Young and Dick Ward sprang into action, using the Internet to voice their frustration and generate interest among fellow technicians.

They've had little success in effecting change with either the dealers or the auto maker.

In 2003, the four began planning a lawsuit against Ford. But without proper resources, the group looked for help.

They met with the International Assn. of Machinists and Aerospace Workers (IAM) leadership in the fall. A deal was cut. The technicians, using their website, would provide leads and assist in organizing service departments for the union. In return, IAM handles the logistics of the prospective lawsuit.

The lawsuit still has not been filed. It's questionable if it will ever get to court. At the time of the meetings, the technicians only had 5,000 signatures of people wishing to participate.

The IAM attorneys instructed the group they would need at least half of Ford's 45,000 technicians to sign on. As of mid-January, they had 12,000 signatures.

Ford dealers can expect to see a blitz promoting the suit. IAM members will be visiting dealerships handing out thousands of flyers encouraging technicians to participate in the lawsuit.

In the meantime, the technicians spearheading the effort are ramping up union organization activities. Several dealerships in Texas and southern California have been targeted, but so far, only one store has voted and that was a vote against the union.

Currently, the IAM represents 135 Ford dealerships and 3,500 technicians.

Both Mark Ward and Jeff Colgrave admit the dealers are caught in the middle of technicians' fight with Ford.

Colgrave sees the unionization efforts as a “divide and conquer” strategy. The plan is to hound the dealers into supporting them.

Ford declines to comment on the unionization effort, saying it's between the dealers and their employees.

Francisco Codina, president of Ford Customer Division, has responded to technician complaints, by establishing a panel of up of 40 technicians who will review changes to the labor times.

“The technician panel was a great idea, and, frankly, it should have been done in 1999,” says Ward.

The problem is that the panel only will review future time rates, not the ones that were established in 1999. Ward and his colleagues want those rate adjustments rescinded.

The Ford Dealer Council realizes the issue is becoming a problem. It's made the labor time rates one of its top five issues for 2004.

Step by Step: the Union Process

Here's the typical chronology of labor organizing at dealerships.

  1. A dealership staffer calls the union and indicates interest.
  2. The union holds meetings for all interested employees.
  3. If there is enough interest, the union notifies the dealer it intends to file a petition with the National Labor Relations Board to hold a vote.
  4. The dealership and union negotiate on the particulars of the vote.
  5. A vote is held 42 days after the petition is filed.
  6. The union has the option to pull the petition anytime before the vote. This typically happens if the union is unsure of the vote's outcome.
  7. A NLRB agent oversees the vote. Union officials usually are not allowed on the premises during a vote.
  8. As soon as the voting is finished, union officials and the dealer observe the agent counting the vote.
  9. If the vote is to organize, negotiations on a contract begin.
  10. If the petition is pulled before the vote, the union can't organize in that store for six months. If the union is voted down, the union is prohibited from organizing for 12 months.