Why UAW organizers might make waves at Nissan

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NASHVILLE -- To the casual observer, it looks like Nissan Motor Co. is back in the cross hairs of UAW organizers. The union held a worker rally over the weekend near Nissan’s big assembly plant in Canton, Miss., hoping to draw support to unionize the 3,300-worker factory.

In the past 30 years, the UAW has called for only two representation elections at transplant auto assembly factories, and both of them were at Nissan. Both of them rejected union representation at Smyrna, Tenn. Canton’s workers have also given UAW organizers a cold shoulder in the past.

But something else is under public scrutiny in Canton at the moment, and it involves automakers across the industry. It is regional wage discrepancy.

It’s common for American industries to pay employees in one labor market more than employees doing the same work in another labor market. If a computer company pays workers in Manhattan more than its workers in Des Moines, no one blinks.

But that has not been the tradition of the U.S. auto industry -- and especially not the tradition of the UAW. At least not until lately.

Blood, sweat and tears flowed for years before the UAW and the Detroit 3 agreed on a two-tier wage structure, which now pays newly hired UAW autoworkers less than experienced ones.

What the nonunion non-Detroit 3 have done is different. Over the past decade, they have migrated from their original practice of paying near-parity wages with the unionized Detroit 3. Instead, they base their assembly plant wages on the expectations of their local labor markets.

As a result, workers at Nissan’s Smyrna plant make wages on a scale that is attractive among Tennessee manufacturing workers; and workers at the Mississippi plant make wages on a scale calibrated to be attractive in their central Mississippi market.

The idea is that Carmaker A is not competing to attract autoworkers from Carmaker B 400 miles away. Rather, Carmaker A is competing for workers against Employer X across town, or Employer Z next door, whether they are auto industry companies or not.

The resulting difference is about 10 percent lower wages for Nissan’s Mississippi workers than for its Tennessee workers.

Toyota follows the same practice. So do Hyundai, Volkswagen and the others.

The fact that Hyundai pays lower wages in Montgomery, Ala., than General Motors does 250 miles north in Spring Hill, Tenn., did not stop 20,000 locals from lining up to apply for 877 new job openings at the Alabama plant last month.

But as they say in presidential elections, “people vote their pocketbooks.” Laying the issue of wage discrepancy out bare before workers is bound to be discomforting to some. “Your co-workers make more money than you do” is a provocative statement.

To suggest that it will push workers into the arms of union organizers might be extreme. More realistically, at a time when automakers are running plants day and night to keep up with demand, it could pressure Nissan and others to tweak up their hourly wage scales a bit.

You can reach Lindsay Chappell at lchappell@crain.com.

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