For some two decades, Project Labor Agreements, or PLAs, have enabled unions in various states to dictate hiring for large-scale, taxpayer-funded construction projects. In Michigan, at least, this labor monopoly has been thwarted. On September 6, the U.S. Court of Appeals for the Sixth Circuit upheld a Michigan law, Public Act 238, enacted last year to bar the use of government-mandated PLAs. The legislation was a response to a lower court ruling in favor of the Michigan Building and Construction Trades Council, an AFL-CIO affiliate. The latest ruling marks a second major victory this year for the open shop; New Jersey Republican Governor Chris Christie in April vetoed a bill that would have mandated PLAs for coastal-area reconstruction in the wake of Hurricane Sandy.
Few things mobilize unions more than the prospect of passage of a Right to Work law in a given state. This reality of labor politics also applies to the aftermath. Just hours ago, a group of unions filed an appeal with the Michigan Supreme Court to overturn an August 15 ruling by a state Court of Appeals that public-sector Right to Work legislation, passed in December, applies to state civil service employees. That decision, for the time being, freed roughly 36,000 Michigan state government workers from worrying about losing their jobs because they refuse to pay financial tribute to a union.
The employees of battery maker LG Chem still haven’t found anything to do worthy of their pay since they were caught playing games and watching videos four months ago, and now the Inspector General for the U.S. Department of Energy has embarrassed the company into returning some – but not much – of the $142 million (out of a $151 million grant) in taxpayer money they took.
Gregory Friedman released his report – which was based on an inquiry spurred by the original media stories in the fall about the mostly idle workers in Holland, Mich. – last week. Turns out the reports about workers on-the-clock playing Texas Hold ‘Em and video games, doing Sudoku and crossword puzzles, and volunteering at nonprofits like Habitat for Humanity, were not exaggerations.
The authorization was the final major hurdle needed to complete the transaction. A123 had been granted $249 million to refurbish two plants in Michigan for battery production, another $30 million as a subcontractor for another stimulus-funded wind energy storage project, and various other grants and contracts by state and federal governments. But A123’s executives, while making sure their own bank accounts were well-taken care of, ran the company into the ground and now Wanxiang will reap whatever technology value is left, for cheap.
The increasing overlap of labor and political activism is an insidious form of public corruption in this country. It enables union officials to deemphasize their role of representing workers at the bargaining table in favor of advocating policies to socialize the economy, building incestuous relationships with politicians, and fattening their bank accounts. This tendency was heavily felt in 2012, a presidential election year. Union leaders recognized the need to re-elect their ally and benefactor, President Barack Obama, over someone who was a wealthy Republican with a strong business background; i.e., someone they truly could despise. They got what they wanted. In the process, they further built a political infrastructure. Yet union leaders also experienced reversals of fortune at the state level - most of all, in Michigan - where they had been used to getting their way.
The past year was a dismal one for the passé idea that government would use taxpayer dollars responsibly, and that was nowhere more evident than with President Obama’s initiatives to promote “clean” energy technology companies and projects with so-called “stimulus” funds and other public money. NLPC reported extensively on some of the most egregious examples.
And now there are two dozen. This Tuesday, December 11, the Michigan House of Representatives passed, and Governor Rick Snyder signed, a pair of laws designed to protect employees from having to pay dues (or "agency fees" in lieu of joining) to a union in order to keep their jobs. The measures, one each applying to the private and public sector, make Michigan the nation's 24th state with "Right to Work" legislation. "We are moving forward on the topic of workplace fairness and equality," stated Gov. Snyder during an evening press conference following passage. Unions are taking the opposite view. About 12,500 opponents showed up at the State Capitol Building in Lansing to protest, with about 2,500, many of them shouting slogans, jamming the interior.
The auction for the assets and business of green stimulus recipient A123 Systems has been won by Chinese auto parts manufacturer Wanxiang Group, which aggressively sought the electric vehicle battery maker at least since the summer.
The successful bid – reported to be about $260 million – follows weeks of warnings by the U.S. government, congressmen and a group of former military and other leaders that transfer of the Massachusetts-based company would compromise American jobs, technology and security. The auction attempts to address some of those concerns, as Wanxiang was not awarded any of A123’s contracts with the U.S. Department of Defense. Instead the company’s “government business,” including all its military contracts, was awarded to Illinois-based Navitas Systems.
The Chinese government, unsurprisingly, has approved a potential sale of stimulus-funded ($279 million-plus) A123 Systems to one of its own automobile parts manufacturers, should the Wanxiang Group’s bid be the highest this week for the bankrupt electric vehicle battery maker.
That was the easy part.
So far Republican Sens. Charles Grassley (Iowa) and John Thune (S.D.) have repeatedly raised questions and concerns about the possible transfer of A123’s business, jobs and technology from the U.S. – where taxpayers have thrown in approximately $132 million only to see many times that amount in losses since its 2009 initial public offering – to China. They’re no longer the only voices speaking out against the transaction.
A123 as a whole, or in pieces, is going to be sold to the court-approved buyer(s). That is likely to be either Johnson Controls, which is the lead bidder for the company’s automotive business, or Wanxiang Group, which wants to buy the whole company. A123 had an agreement to transfer up to 80 percent of the company’s ownership to the China-based automotive parts manufacturer over the summer, but its bankruptcy filing on Oct. 16 – with Johnson Controls as the new automotive assets purchaser – nullified its agreement with Wanxiang.