News Story

Right-To-Work Matters for Some Michigan Businesses

'If you treat your people right, they don't need a union'

AUBURN HILLS — When Michigan-based Android Industries needed a place to expand this year, it chose Ft. Wayne, Ind.

"Indiana became a right-to-work state and (it) offers us a competitive location," Android Vice President of Human Resources David Donnay told the Indiana Economic Development Corp. Android added 4,000 square feet to a building and invested $7.3 million at the facility with a target of adding 70 employees.

So did the pending right-to-work law come too late for the company to consider Michigan?

"There are many factors that go into a decision on where to expand," Donnay said.

He said Android prefers right-to-work states because it gives workers a choice whether or not to financially support a union. 

The auto-supplier, which specializes in complex modular systems primarily for Detroit's automakers, employs 2,200 workers throughout Europe and the Americas. Half of its plants are non-union facilities.

"If you treat your people right, they don't need a union," he said. The company bases wages and benefits on the market rate, he said, but he added that he does not anticipate wages and benefits changing in Michigan when it becomes a right-to-work state. 

Android operates in two right-to-work states, Indiana and Texas. Donnay said the compensation packages in those facilities are identical to similar facilities in those areas. If the compensation packages in those states are too low, workers will go to other states, he said.

Donnay says he was surprised when he learned Michigan lawmakers were likely to approve a right-to-work law. He said he thinks a right-to-work law could open the door for Toyota and Honda to open a facility in Michigan, and he thinks it will preserve what he thinks was one of the best things to happen in the Detroit auto industry: the two-tiered pay system, which allowed the auto companies to hire new auto workers at lower wages than veteran workers. 

Another company pleased with Michigan's decision to likely become right-to-work state is Indiana-based Steel Dynamics. The company operates in 27 states, including Michigan.

"We're not anti-union, but pro-choice," said Ben Eisbart, Steel Dynamics vice president for human resources.

However, Eisbart said he doesn't think a right-to-work law will influence the company's thinking in deciding where to expand or acquire companies.

"We purchased companies in Michigan before a right-to-work law," he said, adding that competitiveness and the productivity of acquired companies has to offset drawbacks from buying a company with a union workforce.

He said the company has maintained positive relations with its union workers, but he said what works best is allowing individual workers to reach their earnings potential based on incentives and productivity. He said he is convinced that kind of system allowed Steel Dynamics to get through the 2008 economic crash with no layoffs.


See also:

Facts On Right to Work vs. Forced Unionization States

The Public Employee Union Problem

10 Stories Showing Why Mandatory Government Collective Bargaining Is Counterproductive

Right-to-Work Law Would Help Ensure Government Unions Could Not Elect Their Own Bosses

The Union 'Free-Rider Problem' Myth In Right-to-Work Debate

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.