Why do foreign auto companies focus on being unionfree in the United States?

While frequently unionized in their home countries, foreign multinationals often try to remain union-free when opening factories in the United States. The auto industry offers such a case. There are more than 30 automobile assembly, engine, and transmission plants in the United States that are wholly owned by foreign auto companies, but not one is unionized. New factories are strategically located in rural and southern locations where unions are traditionally weaker. These factories are often subsidized by state and local governments trying to attract new jobs. A new Honda plant opened in 2008 in Greensburg in southeastern Indiana with the help of $140 million in tax breaks and other subsidies. To staff the factory, Honda considered job applications only from individuals living in the 20 counties within an hour’s drive; individuals from the 72 other counties in Indiana were not allowed to apply for positions, even if they were willing to move closer to the plant if hired. Thousands of laid-off Indiana autoworkers from unionized General Motors plants were thus prohibited from applying for the jobs at Honda because they lived outside the restricted hiring zone. In 19 of the 20 counties within the hiring zone, the population is 96 percent white.

QUESTIONS

1. Why do foreign auto companies focus on being unionfree in the United States?

2. Why do you think Honda implemented its restrictive hiring policy? Is it an antiunion tactic? Is it discriminatory?

3. Should Honda’s restrictive hiring policy be illegal? Is it ethical?

Budd, John; Budd, John. Labor Relations: Striking a Balance (p. 19). McGraw-Hill Higher Education. Kindle Edition.