Wall Street Journal editorialist Allysia Finley conveys the perspective of Braidy Industries CEO Craig Bouchard, who is opening an aluminum mill in right-to-work Kentucky. Regarding an earlier company, experience with which soured Bouchard on organized labor:
They sold it for $1.2 billion to the Russian steelmaker Severstal in 2008, shortly before the stock market and steel industry crashed. Thousands of workers subsequently lost their jobs. Mr. Bouchard blames the United Steelworkers. He had first tried to sell a partnership stake in Esmark to the Indian company Essar Steel. But the United Steelworkers sought to force a sale to Severstal, which the union perceived as more labor-friendly. Had the Essar deal been consummated, Mr. Bouchard says, “every one of those people would have their jobs today” because all of the company’s debt would have been paid off.
Obviously, this is one side of that story, but the moral from the CEO’s point of view is that business decisions should be left to business owners. That includes other pitfalls of unionization, like work rules that constrain activities beyond what the employer and employee would accept if left to their own and other costs, like pensions.
The key part of the op-ed, though, may be the bigger picture. Bouchard’s new company is built on innovation in the metallurgical sciences. Our broader tax and regulatory regime slows down that sort of innovation. Another culprit is an unhealthy aversion (across the ideological spectrum) to allowing “creative destruction” to usher out old technologies and ways of doing things and ushering in the new.
A society should provide leverage for workers as the capitalism charges forward, but labor unions, protectionism, and regulation don’t appear to be sufficiently effective. What we need is something broader, more cultural — dare I say, more spiritual — that allows us to make individual decisions and negotiations within a framework of mutual respect and support.