HONOLULU—Worker representatives from nine ILWU organized auto dealers met for two days at a state-wide caucus in Honolulu on May 29-30, 2003, to talk about common problems they face as workers in the auto industry and to propose changes to strengthen the language in their union contracts. They were also joined by the full-time business agents who service auto units.
The caucus was chaired by Richard Desmond, from Schuman Carriage, and secretary Kenneth Ige, from Servco Pacific.
Four of the larger auto units, Valley Isle Motors, Schuman Carriage, Honolulu Ford, and Servco Pacific, will be negotiating
new contracts with their employers later this year. The four companies employ 375 ILWU workers or more than 83 percent
of the 450 unionized members in the auto industry. Cutter Maui is currently negotiating a contract and the remaining four units have two or more years before their contracts expire.
Job security
The threat of losing their jobs and the need to mobilize and educate members around job security was a major focus of the
two-day meeting. The concern over job security was brought on by recent events at Cutter of Maui, where most of the 37
ILWU members working for the company lost their jobs when Cutter sold its General Motors and Nissan dealerships to Valley
Isle Motors and the handful of remaining members are fighting to protect their rights and livelihood against one of Hawaii’s largest companies.
The caucus participants looked carefully at what could happen when a company is sold. In the past, most sales involved only a
change in management—none of the workers lost their jobs and wages and benefits remained unchanged. The new management signed on to the existing union contract and assumed all the financial obligations of the workers’ prior years of service.
Recently, however, in a growing number of sales, the new owners try to get a cheaper deal by negotiating a new contract (which is happening at HT&T) or rehires less than half of the former workers and operates non-union (which happened at Hawaii Motors). The National Labor Relations Act only requires a new owner to recognize and bargain with the union if it rehires a majority of former workers and the business remains largely unchanged. A new owner who hires less than half of the former workers is not required by law to recognize the union or bargain a new contract. Such a new owner could set whatever wages, benefits, and working conditions it pleased.
Stronger contracts
By itself, the law provides only limited protection to workers when a company is sold. To further safeguard their jobs and
livelihoods, the caucus looked at strengthening the union contract to require a new owner to sign on to the existing contract. This protects wages and benefits, and more importantly, requires the new employer to recognize and bargain with the workers and their union.
Attorney Rebecca Covert addresses the statewide auto caucus.
The caucus looked at language in the Honolulu Ford contract which requires a purchaser to be bound by the existing agreement and language negotiated at the Honolulu Airport Hotel which requires the employer to condition a sale on getting a written agreement from the buyer to assume the union contract.
Actually getting such language into the contract will depend on the strength and unity of union members. Members need to
understand how a strong union and union contract are vital to their job security. And members need to get more involved and
show strong support of their union team when it’s time to negotiate a new contract.
Auto is big business
Auto sales is big business in Hawaii. Each year Hawaii Business Magazine publishes a list of the top 250 Hawaii companies, and last year 20 automobile dealers made the top 250 list. The twenty auto companies had a combined annual sales of over $2
billion dollars and employed 4,911 people in 2001. They also did fairly well, reporting an average increase of 5% in sales
over 2000. For more information go to: www.hawaiibusiness.cchb82002/default.cfm?articleid=12
Cutter of Maui is big business. It is part of the Cutter family empire of 32 automobile franchises in Hawaii and California
and is the 64th largest auto dealer in the nation. The company sells a wide variety of brands, including Ford, Isuzu, Dodge, Chrysler, Jeep, Chevrolet, Mitsubishi, Nissan, Hyundai, Volkswagen, Oldsmobile, Cadillac, Pontiac, Buick, and Mazda. The company, run by Gerald and Nick Cutter (uncles of Governor Linda Lingle), reported sales of $470 million and 968 employees in 2001.
In terms of sales, the Cutter Management Company is the 15th largest company in Hawaii in Hawaii Business Magazine’s
annual rankings of the 250 top Hawaii companies in 2001. A similar ranking published by the Ward’s Dealer Business magazine lists the Cutter Automotive Team at number 64 in its annual Megadealer 100. For more information go to: http://wdb.wardsauto.com
The second largest Hawaii auto dealer is Servco Pacific with $428 million in sales and 1,237 employees. Servco is number 17 on the Hawaii Business list and number 73 on the Megadealer 100 list. The company sells the Lexus, Toyota and Chevrolet
brands.
The data published by Ward’s shows where the dealers make their money. The chart at left compares the Cutter and Servco
operations for 2002, and shows that Cutter gets much more of its revenues from used car sales, financing, and sales of parts and accessories. Servco gets the bulk of its revenues from new car sales.
