Unions say they help dealerships but dealers aren't so sure about that

Unions Pro For most people, the words trade union conjure images of auto factory workers, coal miners, steel workers and truckers - not car dealership employees.

But in some parts of the country, notably the San Francisco Bay area, Chicago, and New York, a significant number of dealership employees, well over 100,000 it is estimated, are organized and have been for many years.

Two major unions, the International Assoc. of Machinists (IAM)and the International Brotherhood of Teamsters, are the most active in organizing dealership workers, with the IAM attracting service technicians and the Teamsters attracting less-skilled workers, including parts counter people, detailers, lot attendants and others.

"In our area, up to 50% of dealership employees belong to unions," reports San Francisco-based labor relations attorney Rob Hulteng, whose firm, Littler Mendelson, represents individual dealers and dealer groups in their negotiations with the unions.

"This is an area with a very strong union tradition, going back to the General Strike of 1934 when the Long-shoremen's union shut down the Port of San Francisco. Up until the late 1970s, most of the dealership employees here belonged to at least one union, and some dealers work with as many as four."

Although the private-sector organized labor movement has lost much of its steam since the glory days of the 1930s and '40s, unions are still a source of concern to dealers in many parts of the country - as are human resource issues in general.

Mr. Hulteng says employee complaints, ranging from wrongful firing to employment discrimination to sexual harassment, to name just a few, are occupying a growing list of concerns for business owners across the country.

"When I came to work here 23 years ago, our firm had 20 lawyers," says Mr. Hulteng. "Now we have more than 400."

One way to stem the tide of employee lawsuits, say union organizers, is to invite a trade union into the dealership to represent the employees in matters of wages, workplace rules, and grievance processing.

Only a union, they insist, can ensure that both employees and business owners are treated fairly, and that disputes arising from what really amounts to little more than poor communication can be averted.

"The fact is that nobody has seriously tried to organize car dealership employees," says Steve Mack, secretary-treasurer for Local 78 of the Teamsters Oakland office, who believes organized dealerships are more efficient than non-union shops.

"Having procedures for discipline and collective bargaining in place makes a dealer a better manager," he says. "Especially if it's a manager who doesn't pay very close attention to what goes on in his back shop. And most dealers don't."

The union-dealer relationship doesn't have to be adversarial; in fact, examples of employer/employee cooperation abound in Bay area dealerships, according to Mike Day, directing business representative for Automotive District Lodge 190 of the IAM.

He says that Bay area membership in his union includes approximately 10,000 dealership service technicians.

"Wages aren't the only issue," Mr. Day sayst. "Service techs in the Bay area command the best wages in the country. But the rest of the compensation package is just as important - health, welfare and pension. We have our own health insurance plan, which is jointly administered by both the machinists union and employers."

Mr. Day also has worked to set up service tech apprentice programs with junior and community colleges around the Bay area (currently 650 service tech apprentices enrolled), and he has helped obtain state money - $11.2 million, a sum that amounts to 1/10 of 1% of unemployment insurance paid by employers - to update the training of journeyman technicians.

"The employers also receive some compensation for training their employees, so it's a win-win situation," Mr. Day maintains.

Although the unions and car dealers sometimes must "butt heads," as one union organizer put it, unions and dealers usually manage to find common interests that lead to mutual benefit.

"I'm pro-business as much as I'm pro-labor," asserts Vern Dutton, business representative for Concord, CA-based Local 1173 of the automotive machinists lodge.

Mr. Dutton was a diesel mechanic for 25 years before becoming a union organizer. "I want all the businesses whose employees are unionized to be highly successful and competitive in the marketplace. Most unionized companies tend to be as much if not more profitable and productive than non-union enterprises. The proof is that the vast majority of Fortune 500 companies are unionized."

Mr. Dutton feels that many of the charges against the unions are exaggerated and, in some cases, downright false. He is quick to refute the charge that unions rules are inflexible.

"We've negotiated about 50 contracts out of this office, and every one of them is different," he maintains. "You can't be inflexible because every company's workforce has different needs and expectations. I think years ago the unions were more rigid in their demands, and when those demands weren't met, they'd go out on strike and other unions would go out on strike in support of each other. Today a strike is seen as a last resort."

Steve Mack of the Teamsters says that unions can help a dealership retain its employees. "Unions have much better pension plans than an individual dealership can offer," Mr. Mack observes. "And the good pension often makes employees want to stick around, especially those smart enough to understand that they too will get old enough to retire one day."

Another benefit, says Mr. Dutton, is that unions bring buying power to a dealership in terms of benefits packages and can also attract new customers.

"In Contra Costa County alone, we have 65,000 unionized workers - teachers, firemen, policemen, just about every trade you can imagine. If you advertise that you're a unionized dealership, it's a big draw for union members."

Do unions protect incompetent employees? "Just the opposite," says the IAM's Vern Dutton. "We protect incompetent managers by helping them draw up workplace rules and policies, and then enforce those rules consistently. Car dealers are sometimes notoriously bad managers. The union provides them with a go-between in employee relations matters. I probably spend half my time intervening in situations where labor and management just haven't communicated very well."

When unions and dealers do butt heads, a strike is not the inevitable outcome. Mr. Dutton's machinists local has come up with a few innovative alternatives to the old-fashioned work stoppage; he hires homeless people to picket a dealership with which the union is displeased.

Unions Con Unions and car dealers have a love/hate relationship. Unions love to organize dealership employees and dealers generally hate it when they do.

Says one dealer, who asked not to be named, "the unions don't do these guys any good, and they don't do me any good. If you're a good tech, you don't need a union negotiating for you because you can get a job anywhere."

Attorney Jim Hendricks, employee relations counsel to the Chicago Automobile Trade Association, agrees.

"There's such a shortage of top-quality talent in the tech area that a good tech can write his own ticket," says Mr. Hendricks. "If a dealer can find a guy who can book 50-60 hours a week with no come-backs, the dealer just says, 'how much do you want?' Dealers will do whatever is necessary to attract and keep talented techs. It's the ones who aren't the most talented who'll be looking for assistance from the union."

Merrill Frost, national automotive coordinator for the International Association of Machinists (IAM), estimates that his union has more than 40,000 members in automotive locals, including as many as 10,000 in the San Francisco Bay area alone. In the Chicago area, about 3,000 techs belong to IAM, and 900 other dealership employees belong to the International Brotherhood of Teamsters, according to Mr. Hendricks.

Union strength in some cities is more of a tradition than an active effort on the part of the unions to organize dealership employees, Mr. Hendricks points out.

"The businesses that are organized have been organized for a long time," he says. "In the Chicago area, for instance, it's not so much that the unions are out soliciting new members, it's that guys with a grievance go to the unions for help - usually because of some management policy they don't like. It may be a case of disciplining guys for not booking enough hours or a new manager who wants to introduce new concepts to the workplace. Then the guys might turn to the union to help them fight the changes."

Nor have new union initiatives to organize other segments of dealerships, such as the sales force, been very successful in recent years.

"I've seen four recent drives to organize automobile salespeople," says Mr. Hendricks, "and the union has been beaten pretty badly every time. It's tough to organize people who are working on a commission basis."

The dealers, too, have learned how to use collective bargaining methods. The Chicago Automobile Trade Association, a six-county metropolitan area dealer group, represents its 650 dealer members in contract negotiations with the unions.

Mr. Hendricks, a partner in the law firm of Fisher and Phillips (offices in Atlanta, San Francisco, Chicago, New Orleans, Fort Lauderdale, Newport Beach and Houston) personally handles the contract negotiations. He points out that only 240 dealerships -fewer than half the dealership members of the CATA - are union shops.

Contracts are negotiated every four years. Mr. Hendricks reports that relationships between dealers and unions are difficult to describe in general terms.

"It depends to a great extent on the individual dealership," he says. "I have some dealerships that are organized, and I never hear from them. That means they have good relations with the union. Other dealerships call in every other week with a grievance. A whole lot depends on the dealer's approach and whether or not he wants his relations with the union to be always adversarial.

"And a lot also depends on the union representative involved," he continues. "Some are just as antagonistic as hell, while others understand that all of us, employees, the union and the dealership, are working for the same goal."

Among the problems most frequently encountered by dealers in their relations with the unions, says Mr. Hendricks, are benefits and worker dissatisfaction with workplace policies.

"It's almost never about money," he observes, citing the fact that in cities where the unions are strongest, non-union dealerships frequently pay union wages or better so that the dealership will not be vulnerable to union organizers. Of greater concern to many unionized workers are non-wage benefits - is the union's pension plan better than the 401(k) that the dealer is offering? And these days, unionized workers are often concerned about work schedules.

"Auto manufacturers are pushing dealers to do more customer-pay work," says Mr. Hendricks, "so service departments are working longer hours, nights and Saturdays. Guys will look to the union to stop that from happening. But dealerships have to be competitive to get customer-pay work."

Should dealers be wary of unions during a time when efforts to organize dealership employees seem to be at a low level? Absolutely, says Mr. Hendricks.

"I totally concur that poor management can open the door for the unions," he says. "But even a dealer who is a capable manager needs to be aware of what the unions are selling, how good their pension plan is versus what the dealer can offer, how much union members are paying for health insurance versus what the dealer's employees are paying.

"We have between 10 and 20 organizing campaigns every year in Chicago, and the dealers win about 70% of them. But that's no reason for any dealer to be complacent."