Wednesday, October 10, 2007

Honda's Union-Avoidance Strategy

Honda Neal Boudette writes on page one of today's Wall Street Journal that a rule restricting employment applications at a new Honda plant in southeastern Indiana looks suspiciously like a union-avoidance tactic.

Honda's new plant in Greensburg IN (roughly equidistant from Indianapolis and Cincinnati) will be hiring about 2000 workers over the next year.  Honda is refusing to accept applications from anyone living outside the 20 counties surrounding Greensburg.  Honda explains that it "wants workers to live within an hour's drive of the plant so they can get to work on time even in bad weather."  But that explanation -- when challenged legally -- will almost certainly be found pretextual, because Honda refuses to accept applications from outside the 20 counties even from applicants who express a willingness to move into one of the 20 counties upon starting work.  If Honda was truly concerned with employee travel time, then Honda should happily accept applications from folks willing to relocate to Greensburg.

Honda's rule instead appears to be an effort to exclude applications from UAW workers laid off from auto plants in towns like Muncie and Anderson -- towns just north of Indianapolis and just outside of the 20-county boundary line.  Evidence of this can be found in the pay scales Honda is offering.  Boudette explains:

[I]n Greensburg, basic wages will start at just under $15 hourly . . . .  In Big Three assembly plants, UAW workers get about $26 an hour.  Until recently, nonunionized plants owned by foreign auto makers have paid close to that -- about $24 an hour -- which helped damp worker interest in unions.

Paying union scale has long been an effective -- and accepted -- union-avoidance strategy.  Honda, however, appears to have adopted this geographic restriction to avoid paying union scale by deliberately excluding UAW applicants -- and that's a NLRA no-no.

In addition, because the 20-county zone is 80% white, the geographic restriction rule is likely to have a disparate impact on minority applicants.  I cannot imagine Honda prevailing on a business necessity defense if it refuses to accept applicants willing to move to Greensburg.

For more, see Honda and UAW Clash Over New Factory Jobs.


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If the hiring zone is 80% white, how can that be considered discriminatory toward minority hiring? That percentage roughly corresponds to the white/non-white population in Indiana as a whole.....

Posted by: Joe | Oct 11, 2007 7:14:54 AM

Interestingly, it is once again the Wall Street Journal raising the question of racial bias in the plant location strategies of Japanese auto makers in US. The issue was first raised, to my knowledge, by the WSJ back in 1989 or 1990 in a front-page article. Then, as with now, the issue seemed to generate little additional interest in the rest of the mainstream media. Even the imposition of multi-million dollar penalties for race discrimination did not generate substantial media attention.

From my perusal plant-location journals and academic research, Honda and other manufacturers seek a workforce that will be highly resistant to unionization, and a high degree of whiteness is crucial to this strategy, and the geographic restrictions are meant to assure achieving this compositon. Recruiting an overwhelmingly white workforce (note that 19 or the 20 counties eligible for hiring have a 96% white population)is now a standard corporate practice in manufacturing in order to avoid unionization. African-Americans have a tradition of collective action and, generally, a pro-union predisposition that is most unwelcome to corporate decisionsmakers.

In addition, Japanese corporate officials have previously made inflammatory statements that betray outright racist attitudes toward African-American workers. Apparently, these officials are now restrained by US-based PR firms.

Second, the prevailing corporate location strategy is generally aimed at recruiting white workers from a 50-mile radius, who have commuted some distance and are unlikely to socialize at bars and restaurants around the plant after work, and who lack previous social networks among themselves. The aim is to bring together a highly atomized workforce lacking pre-existing ties and loyalties which might spill over into unionization.

Third, the choice of southern Indiana requires some historical context. Indiana--even exceeding any southern state--was by far the most deeply-entrenched stronghold of the Ku Klux Klan. Its membership included the governor and entire congressional delegation in the early 1920's, and it sponsored rallies that drew hundreds of thousands of Klan members.

Fourth, at a moment when labor law and particularly the right to organized have ceased to exist as a living reality, Japanese transplants and others have adopted incredibly intense screening processes, as when one firm scrutinized the applications of 2,500 workers for a plant in Tennessee. No doubt this process includes investigations into past union activities of applicants and their relatives and friends.

While Joe (writing above) is reassured by the aggregate 20% African-American composition of the total area, the previous penalties against Honda should be sufficient to raise some serious skepticism about the corporation's proclamations. This is a situation where excluding the UAW and minimizing the hiring of African-Americans are mutually reinforcing.

Roger Bybee, Milwaukee.

Posted by: Roger Bybee | Oct 20, 2007 1:59:25 PM

I am a honda associate at the Lincoln Alabama plant we are in contact with union organizers this is a good thing wish us luck.

Posted by: james keith | Nov 7, 2007 7:04:08 PM

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