Why do nonunion companies seek to avoid unionization

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Case Study: Certain industries in the United States private sector have a strong union presence. One is the airlines. Even at Southwest, which has generally had a strong relationship with its employees, almost all eligible employees are unionized and have collective bargaining contracts with Southwest. JetBlue operated without any labor union presence since its founding; however, that began to change recently, as first pilots and then flight attendants voted in strong majorities to be represented by unions. The pilots reached an agreement with JetBlue on a contract, which JetBlue said would raise costs significantly. The flight attendants rejected a contract negotiated by their union, the Transport Union of America, with JetBlue. Contract disputes like this sometimes result in work stoppages to gain leverage, which will cost the company revenues. Whether or not that occurs, when a contract is negotiated, it will likely again raise JetBlue's operating costs. Thus, JetBlue will face challenges as it seeks to be competitive as it transforms to having a unionized workforce like its larger competitors. Turning to the automobile industry, we noted in Chapter 11 that the United Auto Workers (UAW) and General Motors went through a long work stoppage (the longest strike in 50 years in the U.S. auto industry). We also saw that the resulting contract, which runs through 2023, significantly raised costs for General Motors. This contract served to set the pattern for the other major U.S. auto producers, meaning they agreed to similar contract terms, raising their costs as well. As in the other industries, nonunion automobile companies in the United States also have union issues. In Chapter 11, we saw that the UAW sought to represent workers at Volkswagen's plant in Chattanooga, Tennessee, but lost the representation election supervised by the National Labor Relations Board (NLRB). Nonunion companies decide where to locate their plants to an important degree based on labor union considerations. As we noted, non-U.S. automakers have placed all of their U.S. plants in the southern United States, which are less receptive to unions (e.g., because of right-to-work laws).

Question 1. After reading this chapter, and thinking about the experiences of JetBlue, Volkswagen, and Google above (and Amazon in the chapter opening), to what degree do you agree with the statement, "Unions are relevant even in nonunion companies"? Identify reasons you agree or disagree.

Question 2. Why do nonunion companies typically seek to avoid unionization? How do nonunion companies go about trying to avoid unionization?

Question 3. It can be tempting to speak of union versus nonunion companies. However, focusing on the automobile makers we have talked about, is the distinction entirely accurate?

Question 4. In what ways can a union company influence the degree of union representation?

Question 5. What is the conclusion of this case?

Reference no: EM133312598

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