Yahoo Finance Chip Factories Are Unions’ Next Target in Test for Biden
(Bloomberg) -- First it was electric vehicles. Now it’s semiconductors. Unions are once again testing whether President Joe Biden can deliver on his promise of a manufacturing boom that boosts organized labor.
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The Communications Workers of America, which represents some 700,000 tech and media workers, is set to begin talks for a so-called labor peace agreement with Micron Technology Inc. that would cover the chipmaker’s $50 billion, two-factory investment in New York. The project recently won funding from the 2022 Chips and Science Act. It would be one of only a handful of US semiconductor sites covered by a union accord, and by far the largest.
Under the agreement, the CWA would not picket, strike or otherwise disrupt Micron’s operations when plants open in 2028 and 2029, and the company would not hire union-busting consultants or otherwise interfere with the CWA’s organizing drive. Micron’s New York investment — which starts at $50 billion but could reach $100 billion for four facilities over the next two decades — could create as many as 9,000 manufacturing jobs in that time frame.
That’s just the latest example of how labor unions are pushing to organize a wave of new factories spurred by Biden’s economic policies, which offer hundreds of billions of dollars in subsidies for technologies from semiconductors to clean energy and electric vehicles. The United Auto Workers, whose strike last year against the Big Three automakers paved the way to organize EV battery plants, is now conducting a unionization campaign at 14 more companies.
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The semiconductor sector may prove more of a challenge. Industry leaders including Morris Chang, founder of Taiwan Semiconductor Manufacturing Co., have derided organized labor in the past. Intel Corp., which secured the largest Chips Act subsidy package, responded coolly to the prospect of union talks, according to CWA President Claude Cummings.
As is the case across other sectors, most of the major new chip factories are located in right-to-work states like Arizona and Texas, meaning unions cannot make membership a condition of employment.
“It’s unfortunate that our discussions with Intel initially did not go well,” Cummings said. “My hope and desire is being able to get an agreement with Micron,” he added, “will open up the minds of other semiconductor companies to sit down and visit with us.”
Intel declined to comment. Micron said in a statement it “respects the rights of workers to form and join trade unions.”
The CWA, like the UAW, has endorsed Biden in the 2024 presidential race. Now they’re looking for the president to use Chips Act grants to exact stronger commitments from firms like Intel, Micron, TSMC and Samsung Electronics Co.
“There’s a chance, because of the government subsidies and the CWA’s political savvy, that they’ll be able to leverage their political influence to get a neutrality agreement,” said Ruth Milkman, sociology professor at CUNY School of Labor and Urban Studies. “That would open the door to a real possibility of success” in organizing workers once factories come online.
Cummings pointed to one key lever the Biden administration can pull: Funding from the Chips Act will be distributed over time, contingent on companies meeting certain construction, production and other benchmarks — and it can be clawed back if firms don’t hold up their end of the deal. That staggered payment schedule, he said, gives the Biden administration negotiating power.
The exact terms of preliminary Chips Act agreements aren’t public. The White House and Commerce Department declined to comment on the specifics of any organized-labor provisions negotiated with award recipients and whether funding would be contingent on those terms.
“We welcome partnerships between the semiconductor industry and labor unions,” White House spokeswoman Robyn Patterson said in a statement.
The White House has previously said it plans to convene Chips Act awardees and industrial unions to “discuss workforce issues.” Commerce pointed to a fact sheet that affirms workers’ right to organize.
“Given that these companies are getting heavy subsidies from the federal government, if we still have a Democratic presidency by the time this place opens, it’s conceivable that they’d be able to do something like that, to put pressure on the company to be neutral,” Milkman said. “But that’s a lot of ‘ifs.’”
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