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Turfscape (44.81)

Manitowoc is Back at Work

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January 20, 2012 – Comments (5) | RELATED TICKERS: MTW

Manitowoc Company (MTW) has resolved the labor dispute with the Machinist's Union that had resulted in a two-month long strike and partial work stoppage for the manufacturer of cranes and industrial foodservice equipment (temporary workers were eventually brought in to keep vital operations up). This is good, as it allows production levels to restore to normal...and people retain their jobs. I'm bullish on MTW and the strike had been a point of worry as the company is still emerging from a re-organization.

The truly interesting part about the resolution of the work stoppage, though, is the terms of the contract with the Union. Pay wasn't reduced. Benefits remained "about the same". Number of employees remained level. The change to the contract? Union members now have the option to receive the same pay and benefits as offered in the contract but drop their Union membership. The company has contractual language that moves their facilities from closed to open shop.

The Union membership decision will happen at the individual level, and will work a little bit like a benefits open-enrollment period. Each year there will be a seven-day period in which every production worker will choose whether to be a Union member or not.

In the short-term, I really don't see many Union members giving up their membership. But, I also don't think MTW was thinking about the short-term. They are clearly looking ahead to the next generation of workers to whom Union memberships don't hold as much appeal. Younger workers have much less affinity and respect for Unions and what they have historically provided. Younger workers are more inclined to believe that they should be rewarded for their efforts on an individual basis rather than be forced to accept the collective reward. Right, wrong or indifferent...MTW seems to be banking on a natural decline in Union membership due to lack of interest. And that positions the company well for greater manufacturing flexibility in the future.

It may hurt organized labor (which I do support), but it shows that organized labor is not thinking as far ahead as companies are right now. Expect much more of this type of action from companies who have agreements with Unions.

I remain bullish on MTW over the next 3 to 5 years.

5 Comments – Post Your Own

#1) On January 20, 2012 at 7:02 PM, Teacherman1 (36.43) wrote:

Good post Turfscape.

MTW had fallen off my watch list for some reason, wish you had posted something about them a couple of months ago, so I could have bought some at that price. :)

 Will look at them again to see where they might go from here.

Have a great weekend.

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#2) On January 22, 2012 at 6:10 PM, rofgile (99.42) wrote:

MTW did a great job on this.  The union no longer has a totally protected cash stream.  If workers think the union isn't helping them, they can just not send in checks anymore and opt-out. 

This should be the law for all unions, there should be no mandatory union membership and due paying (I'm looking at you - teachers unions!).

Go wisconsin!

 -Rof 

(And this is from a fairly liberal perspective.  Most people on the left have their heads up their ****es on unions). 

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#3) On January 23, 2012 at 9:27 AM, Turfscape (44.81) wrote:

rofgile wrote:
"This should be the law for all unions"

While I think MTW did the right thing here, I respectfully disagree that it should be the law of the land.

Manitowoc proves that effective relationships between business and unions can exist WITHOUT additional restrictive legislation. This is the same tactic that Wisconsin should have used in its battle with the public unions. The Governor should have followed the example of MTW or that HOG. Both companies have set a new precedent in their labor negotiations and union relationships without decertifying the unions or refusing their right to exist. They did it at the negotiating table. That's where negotiations belong...not in the chambers of the Capitol.

Wisconsin would be in a better position today had the Governor had the wisdom and fortitude to negotiate instead of legislate. 

I do hope other companies take note of what is going on with companies like HOG and MTW. And if MTW starts perform like HOG has over the past 18 months, then other businesses will HAVE to take note.

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#4) On January 23, 2012 at 10:24 PM, rofgile (99.42) wrote:

Turfscape,

 I simply think that all workers should have the right to opt out of belonging to a union and paying dues.  That is a worker's right.

 Unions often actively support a candidate in local and nation elections, and can contribute campaign funds.  It is abhorrent that a worker cannot choose to not pay into something that may not represent his/her beliefs and may even spend the workers money to campaign for something that the worker opposes.

 The modern union consists of some managers who are making decisions to ensure that they keep their jobs and pay, not the workers they "represent".  Most modern union managers are little more than parasites.  

 On the flip side, I am equally opposed to chain businesses that purposely close sites when they unionize.  That is messed up too.  Workers should be able to legally unionize, but not be forced into a union.  I think that should be a law reflecting both sides of the coin (to most protect workers).

 Note, most unions in the US nowadays have negative effects on the overall businesses.  The US auto industry has done so poorly compared to the Japanese largely due to unions.  It is also due to the Japanese having universal health care and the businesses not having to pay those costs (ie, government subsidizing the businesses). 

 -Rof 

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#5) On January 25, 2012 at 10:37 AM, Teacherman1 (36.43) wrote:

rofgile

Was that a shot at me? :)

I am now retired, but when I was teaching in Texas, there were 3 main unions, and no one had to be a member of any of them.

Most teachers in Texas join the union simply for the cheap insurance to protect them if they get sued, or so if they have a dispute with the administration, they can get legal representation.

 I never used or had to use any services, but others who did told me the usual reply from the lawyers was, yes, you have a case and can probaly win, but it will cost you in the long run, so we advise you just to drop it. :)

They range from the very liberal to the very conservative. I joined the very conservative one because it was the cheapest.:)

All of them lobbied the state law makers for various things ( often at odds with each other:), but in Texas, unions just don't have the clout they have in some other places.

Texas is a "Right to Work" state, so you can be a union member or not. No closed shops.

I think there was a time when unions were needed, but my personal opinion is that time has pretty much passed.

JMO and worth exactly what I am charging for it.

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