Wednesday, October 6, 2010

Unions are so beneficial.

I have an interesting friend. His grandfather ran what is today a Fortune 100 company. His father was very successful as well. My friend went to university for business and accounting and was himself fairly successful in his business endeavors. In his late 30’s he tired of the corporate world and went to work for a non-profit that ran a number of organizations including homeless shelters, facilities and programs for underprivileged youth, and a very successful program to help single mothers obtain life and job skills.

He’s always loved engines and working on cars and trucks though. A couple of years ago he decided to take a well deserved break from the non-profit and find a job as a truck mechanic. He enrolled in a local tech school to get his mechanics certificate and began his job search. Now you have to imagine this. A 50-something guy with a masters degree and 3 decades of successful experience in upper management schlepping around trying to find a job as a truck mechanic. One other thing, he owns homes, very nice ones, in Arizona, Florida, Colorado, Wisconsin, Switzerland, and London. He wasn’t looking because he needs the money.

As an entry to becoming a bus mechanic he drove busses for a short bit. A few days ago though, he celebrated one year as a bus mechanic. And he’s happier than ever, especially when he solves some strange problem on one of their hybrid busses.

HOWEVER, that’s all background.

He works in a union shop. Where once he represented his company in union contract negotiations, today he’s himself a union member. This has given him a very interesting perspective.

His first real encounter was when other mechanics would tell him to slow down and not work so fast. That’s not in his repertoire. His boss was soon assigning him three busses per night while others, all senior to him, got one. He couldn’t have been happier.

He and I have both worked as mechanics in non-union shops and he now has experience in two union shops. He said that there’s a clear difference. The non-union folks, though all are working because they need the money, enjoy what they’re doing. They enjoy solving problems or making a car or truck run better. They’re happy that they can have a job doing something that they enjoy. Across the board though the union mechanics have replaced that enjoyment with angst. Their world is ‘us against the company.’

Similarly, the union guys have lost all sense of accomplishment. After 3 years they reach seniority. There’s nothing to attain nor nothing at risk. Their jobs are ‘union protected’ so they would have to try hard to get fired. And, no matter how hard they work, they’ll gain nothing more. Fixing one bus per night or three makes no difference to them so why work three times as hard? They come, they do their mediocre thing, they go home. And never go home with any sense of having accomplished anything.

When I worked as a mechanic I started on ‘straight time’ which meant I was paid an hourly wage, just like the union guys, and did what I was told. The difference is that I could be fired, and didn’t want to be, and I wanted to impress the boss so that I could start working ‘flat rate’ Flat rate is when you’re paid per job. For instance, replacing a water pump on a 1972 Volvo was rated as 45 minutes. Replacing a cylinder head was 3:15 (three hours, fifteen minutes). I think my rate was $20 per hour so I’d get $15 for the water pump and $65 for the cylinder head, regardless of how long it took me.

My first water pump took about 2 hours - not very profitable. After a few months though I was doing most jobs pretty close to time and soon I was coming in a bit under.

Screwing up wasn’t a good option. If I didn’t do a water pump correctly, I had to fix it, for no additional pay. I was far more careful after my first such experience.

Also, while I was paid $20/hour, my employer actually charged my time out at about $40/hour. This covered costs for the building, utilities, and stuff. More importantly, it was where profit came from. The more money I made, the more my employer made. Mechanics not billing enough time (or who screwed up and made customers unhappy) weren’t making money for our employer and didn’t keep their jobs very long.

My pay was a very direct reflection on how well I did my job. I was incented to work well and work hard. Most days I went home with a great sense of accomplishment, either because I’d made a bit extra money from working harder, or had solved some strange problem, or both. Every employee also shared in the profits (and we were very profitable) so every 3 months we’d get a profit sharing bonus. Every one of us made sure to keep our customers happy and coming back.

Back to the union guys. They work for a company that is subsidized by taxpayers – you and I. The fares they charge only cover about 30% of their expenses. Think about my friend who repairs three buses in the time the other 14 mechanics repair one each. Might it cost us taxpayers less to run this bus system if all of the mechanics did three buses per night? The savings wouldn’t be just that they’d need one-third the personnel (and one-third the benefits AND one-third the pension expense), but they’d only need one-third the facilities, utilities, training, insurance, and other costs of running the maintenance operation.

Interestingly this isn’t our only bus system. We have six other bus companies, all privately owned, serving the same area. All six have nicer and cleaner buses than our public bus system. Three charge the same fare and yet run profitable enterprises. The other three charge higher fares but also provide a much higher level of service. Guess what? None of their mechanics (or other employees) are union. Their mechanics also earn more money than the union mechanics and based on anecdotal experience, are much happier.


BTW, I'm generally a supporter of public transport.

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