UAW Downsizes Its Own Company

0 Comments | Insight on the News, August 9, 1999 | by Michael F. Munday

The United Auto Workers is being sued by workers who claim that the union unjustifiably fired them after taking control of a radio network and manipulating bankruptcy.

Job security may be the battle cry of the United Auto Workers, or UAW, in the current triennial contract negotiations with the U.S. Big Two and Daimler Chrysler. But in a little-noted set of court actions in Florida and Michigan, UAW is being sued for -- among other things -- unjustified loss of jobs by former employees of a company owned and operated by the UAW. While negotiations with U.S. automakers go on, top UAW officials have been distracted by the court actions.

Soon a Washtenaw County, Mich., court may have to decide whether the UAW can keep secret all testimony, including videotapes, taken from UAW officials in the civil action which the UAW itself originally brought to court. Damages in the case could mean a UAW payout of as much as $500 million -- approximately half the amount available in UAW strike funds.

UAW International President Steven Yokich, UAW Public Relations Director Frank Joyce and UAW Chief Counsel Dan Sherrick are among union officials who continued to be questioned about their roles in the United Broadcasting Network, or UBN, which the UAW forced into bankruptcy in 1997 in what plaintiffs call a grab for control. That business does not make autos or auto parts -- it was once a 200-station national radio network whose affiliates currently number only about 60. The UAW now is sole owner of the network.

The cast of players in this story of alleged abuse of workers by a labor union is larger than life. The story ultimately is a tale about who gets to decide what the American people may hear and see in the media.

In 1996 the UAW became an owner, with some entrepreneur partners, of the Florida-based United Broadcasting Network. During the succeeding two and one-half years, the UAW took control and fired more than half the staff. It is those former UBN employees who now are suing the UAW directly in Florida for the loss of their jobs. In a separate action, the UAW's partners in UBN were brought into court by the union on claims including spending too much for airline flights.

The partners, in turn, have sued the union for breach of contract and for what now is alleged to have been a plan by the UAW to drive the value of the radio network down so that the UAW could keep its pieces as a propaganda arm to support the UAW's political agenda.

A review of several thousand pages of correspondence, court filings, testimony transcripts and interviews with former UBN employees and management raises questions about how the UAW conducts business and treats its workers. Recently, in White Springs, Fla., former UBN employee Rebecca Fox explained her treatment as a worker by the UAW.

Fox moved to a picturesque Community on the Suwannee River in central-north Florida to escape the crowding of the Miami megaplex. The proximity of the University of Florida Medical Center in Gainesville was an attraction. Fox's daughter suffers from a form of juvenile diabetes that makes quick medical care a frequent, and expensive, necessity. So in May 1996, when the new owners at UBN, one of the few nonstate employers in this rural town, promised medical coverage for employees such as Fox and her daughter, her coworkers were surprised that she voiced skepticism about the guarantees being made.

"I've been with two small companies -- a copier company and then pest control -- who got bought by bigger companies. They promised us raises and insurance and job stability," she says. "And they used us, and when they were finished learning what we knew about the business, they just told us they were downsizing, and said, `See ya!'" But the new owners of UBN were different, her coworkers assured her. After all, backing this venture was a huge organization which proclaims, "We are the only institution that stands up for working men and women." UBN was being underwritten by a union.

Discovery continues in a lawsuit brought in Florida by Fox and 42 of her former coworkers at UBN, claiming damages against the UAW for the loss of their jobs. While denying the charges of the former UBN workers, the UAW has yet to offer the Florida court an affirmative defense.

Meanwhile, the tale of how UBN came to be owned by the UAW is as winding, murky and dank as the Suwannee River. UBN's predecessor, the People's Network, Inc., was a modest Moneymaker with nearly 300 stations around the country buying its daily programming and thousands of listeners paying dues and buying advertised products. Structured as a nonprofit organization, People's Network founder and radio gadfly Chuck Harder found himself facing claims by the IRS that would force the network off the air unless fines and back taxes of up to $1 million were paid. Harder, who often is cited as one of America's most influential radio talk-show hosts, had convinced many of his broadcast followers that "the Feds were out to get him."

In early 1994 and through 1995, Harder turned to fellow radio commentator, author and economist Pat Choate, whose knowledge of Washington Harder believed might help him with his IRS problem. Choate, often called an "entrepreneur of ideas," saw the potential to make People's Network into a major moneymaker with the right backing. Both Harder and Choate were, and continue to be, promoters of "made in USA" consumerism. Choate reasoned that a well-run profit-seeking network, with compelling on-air talent of various political stripes but unified by a shared belief in strengthening the "Buy American" movement, would be a success. Moreover, with rumblings stirring in the nation's capital that led to the Communications Act of 1996, Choate saw an opportunity to create from Harder's network a leading force in talk-radio broadcasting and sales.