From Sweden to Obama – The Peculiarity of Union Influence (Part 2)

Please click here for the first installment in this series.

After my undergraduate studies in Sweden, I went to work for a Japanese manufacturer in Osaka. But two days before I left for Japan, the Swedish bank employees decided to go on strike, shutting down all Swedish banks for over a month! ATMs were quickly drained, and within two weeks, stores stopped accepting checks and credit cards. It was a mess – the economy effectively shut down. With a Socialist administration, there were no responsible adults at the helm, no chance of a repeat of Reagan's showdown with the air traffic controllers.

Japan, by contrast, sees little union influence in its corporate affairs. As few private sector union strikes as there are in the US these days, Japan sees less than 10% of the US losses to labor union strikes. In other words, workday strikes are practically nonexistent in Japan – the Japanese unions are careful to not bite the hand that feeds them. I eventually switched companies in Japan and started to work as a technical liaison managing final assembly installation projects with Japanese automotive industry, particularly Toyota.

Among the 50 or so automotive plants I visited around the world, the ones in the US stood out for their bureaucracy. For basic equipment installations that would have been handled by a single person in Japan, the exact same activity in the US involved the chief electrician, his assistant, the line foreman and one or two others. It was amazing to see the inefficiency. Well, perhaps not as amazing as the very slow tempo on the assembly line – with people playing the guitar, reading and doing other things while sitting in their chairs waiting for the next engine to mosey on down the conveyor belt. This was in a GM engine plant in Detroit in the mid '90s, and it was painfully obvious that this approach was not sustainable or competitive. We all know what happened since then...

Actually, maybe not all of us. It looks like the bakery, confectionary, tobacco workers and Grain Millers Int'l Union and the Teamsters remains ignorant of the damage done by unions. These unions pushed Hostess (an already mismanaged company, mind you) over the edge a couple weeks ago. Let's hope the 18,500 (by now former) employees enjoy what their union dues bought them.

Just as I recall from the GM engine plant, the Hostess operations were equally plagued by inefficiencies such as having to separate cake and bread deliveries onto different trucks even when delivering to the same location. Bread workers weren't allowed to load cakes and vice versa. Drivers were only allowed to drive, not load anything. Yet more employees had to move products to retail shelves! Well, that union gravy train is now gone.

How long we can afford to let this self-inflicted illness to continue? Does anyone think that unions are still relevant in their current form? What evil employment practices still exist that current state and federal laws don't already address? How many more companies like Hostess will have to put the nail in the coffin in? One option is to apply the full power of the RICO Act to labor unions to reduce unemployment. However, just as in Sweden, when you have an administration that is attached to the hip with the labor movement, there is little hope of any change.

- Thomas Kase

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