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Column: Nonunion automakers are matching the UAW’s great contract, but that may be bad for the UAW

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Column: Nonunion automakers are matching the UAW’s great contract, but that may be bad for the UAW

A funny thing happened in the wake of the United Auto Workers’ recent contract settlements with major auto companies .

Toyota said it would give its workers a raise worth about 9% on its top pay rate, beginning in January.

Nissan said its 9,000 U.S. workers would get raises of about 10% and would end a two-tiered pay system.

When we return to the bargaining table in 2028, it won’t just be with a Big Three, but with a Big Five or Big Six.

— UAW President Shawn Fain

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Honda announced a pay raise of 11% for workers at its plants in Ohio, Indiana and Georgia, along with an accelerated schedule of bringing workers up to the top rate to three years from six.

Subaru said it would raise pay at its plant in Lafayette, Ind., though it hasn’t said by how much.

What’s funny about these announcements is that none of these companies is covered by a UAW contract. But they could read the handwriting on the wall from the UAW’s contract settlements. If they didn’t UAW President Shawn Fain made sure they wouldn’t miss the message.

As some of the leading nonunion shops in the industry, they responded almost instantaneously. Before the ink had dried on the union’s agreements with GM, Ford and Stellantis (the owner of Chrysler and Jeep), he announced that his next targets would be the foreign automakers that had set up their shops in anti-labor states to keep unions from their doors.

“One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said. “When we return to the bargaining table in 2028, it won’t just be with a Big Three, but with a Big Five or Big Six.” (He also signaled that he would be pushing to unionize Tesla.)

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There are a few ways to look at this. One is that the UAW has absorbed the lesson that the key to organizing new locations and recruiting new members is achieving victory in contract negotiations. That’s what brings union membership out of the abstract and makes its benefits concrete.

Few things spell success like the contract terms reached by the UAW after its six-week strikes in September and October — including historic wage gains, the rollback of many concessions the union gave the companies to ensure their survival during the last recession, and assurances that the industry’s transition to electric vehicle manufacture won’t proceed without union participation. As far as that goes, the new contracts are a great advertisement for the virtues of union membership.

The improved wage scales and other workplace benefits announced by the Japanese automakers are, of course, good for those companies’ employees, who become collateral beneficiaries of the UAW’s efforts.

It’s also true, however, that the nonunion companies’ responses could successfully undermine the UAW’s organizing efforts.

“When you have a half-unionized industry where the unions have real ability to make a difference, the non-union companies have to follow along or they are just inviting the unions in,” labor historian Erik Loomis told me. “It becomes very easy to siphon off union support in a factory when the wages are the same plus the workers don’t have to pay dues.”

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Indeed, the technique of fighting unionization by offering workers better pay and benefits is as old as, well, labor-management relations themselves.

In his 1993 memoir “Confessions of a Union Buster,” former anti-union consultant Martin Jay Levitt related “the five key corporate failings that drive workers to seek union help,” as his very first boss outlined for him: “lack of recognition, weak management, poor communication, substandard working conditions, and non-competitive wages and benefits.”

If a company dealt with these issues, Levitt was instructed, “it can achieve a happy work force and never have to fear a union invasion.”

None of that means that the raises announced by Toyota et al are, or should be, the equivalent of everything a union can offer workers at an organized plant or company.

There may be other benefits that aren’t offered by the nonunion employers, including job security guarantees — especially in anti-union right-to-work states where many foreign automakers and some domestic manufacturers have set up shop, such as North and South Carolina, Indiana, Alabama, Tennessee, Kentucky, Kansas and Georgia.

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Nor should it escape workers’ notice that the nonunion companies had to be goaded by the UAW’s success into offering raises to their own employees.

“Why not the raise before the UAW’s?” asks veteran union lawyer Thomas Geoghegan. “It should tell auto workers at Toyota, Honda, and Subaru, who had nowhere else to go anyway, that they were being paid less than they were worth.”

The companies’ motivation may be to keep the UAW from storming their gates, Geoghegan says, “but it may backfire by making the workers wonder why a raise now, and not before. We don’t have truly competitive labor markets, paying people what they are worth — if we did, then that raise would have occurred without the UAW.”

In other words, the UAW, along with other heavy industry unions such as the Teamsters, have a ways to go to reinforce their recent victories by carrying their fight to new plants in parts of the country — such as the Deep South — where they have long struggled to make headway.

They have a lot to show for their efforts thus far, and for at least the next year, an administration in Washington that has supported Americans’ collective bargaining rights like no other administration in 90 years. At the moment, they appear to have the advantage over recalcitrant managements. Let’s see what they do with it.

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FAA clears SpaceX's Falcon 9 rocket for launch after malfunction

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FAA clears SpaceX's Falcon 9 rocket for launch after malfunction

SpaceX’s Falcon 9 rocket has been cleared by the Federal Aviation Administration to resume launch operations after the company determined the cause of an engine failure earlier this month.

The company’s primary commercial rocket was lifting a payload of 20 internet Starlink satellites into orbit on July 11 when the second-stage engine misfired, leaving the satellites in a lower orbit than intended. They later fell to earth and were destroyed in the atmosphere.

SpaceX said Friday the cause of the misfire was a liquid oxygen leak in a line leading to a pressure sensor. The company — whose founder Elon Musk recently announced plans to move the company’s headquarters from Hawthorne, Calif., to the outskirts of Brownsville, Texas — said the leak developed when the line cracked due to a loose clamp.

The FAA said it authorized SpaceX to resume launches on Thursday since the mishap did not endanger the public, but the investigation remains open.

The Falcon 9 has been critical in establishing SpaceX’s Starlink satellite broadband network. It also handles commercial payloads and launches the company’s Dragon capsules, which carry cargo and astronauts to the International Space Station.

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The Falcon 9, which has a reusable first stage, has launched a total 352 missions, according to SpaceX. The company said the first stage used in the failed launch returned to Earth safely. Prior to the mishap, the Falcon 9 had not failed in more than 300 flights.

The rocket last failed in flight in June 2015 when it was carrying out an uncrewed cargo resupply mission to the space station. A Falcon 9 exploded on the launchpad at Cape Canaveral Air Force Station in September 2016 during fueling while carrying a satellite payload.

The importance of the rocket to NASA’s space program has been underscored this month by the troubles experienced by Boeing’s Starliner capsule, which is on its third test flight to the space station.

The capsule, intended to give NASA another vehicle to reach the station, launched its first human flight June 5 for what was expected to be an eight-day mission. But it has remained docked to the station for seven weeks due to helium leaks and a malfunctioning of its thruster engines.

NASA and Boeing officials said Thursday that Starliner could be cleared to return the astronauts to earth as soon as next month, but there has been speculation that a Dragon capsule launched by a Falcon 9 may have to retrieve them.

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From Heisman Trophy to SUV, O.J. Simpson property auction approved to pay off civil claims

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From Heisman Trophy to SUV, O.J. Simpson property auction approved to pay off civil claims

O.J. Simpson’s Heisman Trophy, golf clubs, high-end sports utility vehicle and even his driver’s license will soon be sold to pay off a debt the infamous football star carried beyond his own death.

A Nevada probate judge agreed Friday to a proposal by legal representatives of Simpson’s estate to auction “unique and high-profile” personal property, according to attorney’s representing the estate. It is not clear how much money the auction will raise, but it is intended to help pay a portion of a civil claim by the family of murder victim Ron Goldman.

Thomas Grover, who represents Simpson estate attorney Malcolm LaVergne, said the estate was already “beginning the process to auction the items soon.”

The action comes a day after Fred Goldman, father of slain waiter Ron Goldman, filed a creditor claim in Clark County District Court for $117 million against Simpson’s estate.

Michaelle Rafferty, lead attorney for Goldman, said there were no objections from the Goldman family over the auction.

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“Our hope is that Mr. LaVergne will use very reputable auction houses and that those funds will come back to the estate,” Rafferty said Friday afternoon.

Both sides are expected back in court next month.

Ron Goldman’s family won a wrongful death civil case against Simpson in 1997, which found him liable for the murders of Goldman and Simpson’s ex-wife Nicole Brown Simpson. The family was initially awarded $8.5 million in compensatory damages.

The jury later awarded $25 million in punitive damages to be split between Nicole Brown Simpson and Goldman family members.

The civil victories came after Simpson’s famous acquittal in the double murder criminal case, known as the “Trial of the Century,” in October 1995.

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The 76-year-old Simpson died in April of prostate cancer.

Fred Goldman and daughter Kim lamented that “true accountability has ended” with Simpson’s death. However, Fred Goldman continued pursuing civil collections.

LaVergne was, at first, hostile to the idea of paying off the civil judgment, telling the Las Vegas Review Journal in an interview two days after Simpson’s passing that the Goldman family would “get zero, nothing.” “I will do everything in my capacity as the executor or personal representative to try and ensure that they get nothing,” he said.

LaVergne mellowed, however, and vowed in an interview with The Times to “handle this thing in a calm and dispassionate manner.”

LaVergne’s retraction did not surprise Rafferty.

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“The situation changes dramatically with a death,” she said. “Mr. LaVergne was representing his client personally, and now it’s about the estate, proceedings and addressing creditors.”

Court documents from 2015 show the family has received about $132,000 of the total liability.

The $117 million claim includes three renewed judgments against Simpson from 2015, 2016 and 2022 along with interest. Statutory interest alone from June 3, 2022, to July 25, 2024, accounted for an additional $20.7 million. Goldman is also claiming a daily amount of accrued interest of at least $16,638.73.

It’s unknown what type of memorabilia or possessions remain on Simpson’s property.

Rafferty said she had not received an inventory from LaVergne and does not know ultimately how much the Goldman family will collect.

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She said LaVergne was obligated to give notice about the intended auction houses, assets and opening bid prices.

“We’ll look it over and we’ll have two weeks to object,” she said.

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After 57 years of open seating, is Southwest changing its brand?

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After 57 years of open seating, is Southwest changing its brand?

Jim Kingsley of Orange County, who recently flew Southwest on a two-leg journey from Minneapolis to Los Angeles, likened the budget-friendly airline to In-N-Out Burger.

Both brands are affordable, consistent and more simplistic compared with competitors, Kingsley said.

“They’re not trying to offer all the things everybody else offers,” he said, “but they get the quality right and it’s a good value.”

Change, however, is in the air.

Southwest, which since its founding nearly 60 years ago has positioned itself in the cutthroat airline industry as an easygoing, egalitarian option, upended that guiding ethos this week with word that it would get rid of its famous first-come, first-seated policy in favor of traditional assigned seats and a premium class option. They will also offer overnight, red-eye flights in five markets including Los Angeles.

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Experts say the changes, especially the switch to assigned seating, are a smart move and will appeal to many as the company tries to stabilize its precarious finances that included a 46% drop in profits in the second quarter from a year earlier to $367 million. But it remains to be seen whether Southwest will pay an intangible cost in making the moves: Will it be able to hold on to its quirky identity or will it put off loyal customers, and in doing so, become just another airline?

“You’re going to hear nostalgia about this, but I think it’s very logical and probably something the company should have done years ago,” said Duane Pfennigwerth, a global airlines analyst at Evercore.

“In many markets away from core Southwest markets, we think open seating is a boarding process that many people avoid,” he said.

That is all well and good, but “I didn’t ask for these changes,” Kingsley said. “Cost and quality is what I care about.”

Open seating has its pros and cons, Kingsley said, though he’s generally a fan. On his trip to Los Angeles, his group wasn’t able to get seats all together. But he likes that preferred seats are available on a first-come, first-served basis, instead of being offered for a high price.

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Eighty percent of Southwest customers and 86% of potential customers prefer an assigned seat, the airline said in a statement.

“By moving to an assigned seating model, Southwest expects to broaden its appeal and attract more flying from its current and future customers,” the airline said.

An even bigger draw of Southwest, according to Kingsley, is its policy of including two free checked bags per ticket. This perk often makes Southwest a better bargain, especially for longer trips or bigger groups, he said.

The free bags are a big deal to customers, experts said, and contribute to the airline’s consumer-friendly brand. The airline hasn’t indicated they plan to change their bag policy.

“Southwest has always had a really good, positive vibe,” said Alan Fyall, chair of Tourism Marketing at the University of Central Florida’s College of Hospitality. “It’s free bags, good prices and point-to-point routes. That’s what they stand for and that’s what people love about them.”

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Southwest’s change to assigned seating doesn’t mean they’re no longer a budget-friendly airline, Fyall said, but it does differentiate them from the lowest-cost, lowest-amenity options such as Frontier and Spirit.

The move will also require Southwest to update all or a portion of its fleet to include first-class seats. Currently, all seats on a Southwest flight are identical. Fyall said it’s worth the investment.

It’s an appropriate time for Southwest to make adjustments, said Chris Hydock, an assistant professor at Tulane University’s Freeman School of Business.

“They’ve not been profitable the last couple of quarters and they’ve had some activist investor pressure to increase their revenue,” he said.

Costs such as wages and maintenance have risen across the airline industry even as travel increased after the pandemic. Southwest saw a net loss of $231 million in the first quarter of 2024. Wall Street analysts estimate that assigned, premium seating could boost revenue by $2 billion per year.

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“This is one of the options where they could potentially increase their revenue and do something that a lot of consumers have a strong preference for anyway,” Hydock said.

For Southwest’s changes to pay off, it has to stick to its roots when it comes to its culture and brand, experts and travelers agreed.

“I love Southwest being different,” Kingsley said. “If they’re trying to be like the other airlines, I think they’re shooting themselves in the foot.”

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