It's hard to find winners in the meltdown that occurred last week at the Metropolitan Transportation Authority. A Japanese rail car manufacturing company trying to build a plant in Palmdale announced it was tired of fighting a union-supported environmental challenge and instead would build its plant in another state. The union that took on the company lost the chance to organize hundreds of new workers. Palmdale, which is still struggling to shake off the recession, lost out on an influx of good jobs. And California doubled down on its reputation as a place too messy to do business.
At Los Angeles County's Hall of Administration, news of the collapsing deal sent supervisors and others into a spasm of frustration. Supervisor Mike Antonovich called it “disastrous” and said it was “a tremendous disservice, not only to the workers in the Antelope Valley but to the entire region.” MTA officials lamented the breakdown as a “shame.” Palmdale's mayor called it “devastating.” Labor activists accused the company of bad faith and of distorting the debate.
That's a bad end to a once-promising proposal: In 2012, Kinkisharyo International won an $890-million contract from the MTA to build rail cars as part of the agency's expanding rail network. The company committed to assembling the cars locally after the manufacturing work was done in Japan and said it would eventually look to moving much of the actual manufacturing to California too, creating hundreds of skilled, good-paying jobs. To that end, it bought land from the city of Palmdale and set out to build a 427,507-square-foot plant there.
Labor saw an opportunity too. The International Brotherhood of Electrical Workers pressed the company to allow it to organize the new workers using a streamlined method known as “card check,” meaning that if more than half the workers signed cards asking to be represented by a union, the company would have to recognize it. Unions maintain that the method is more efficient and helps prevent intimidation of workers by the company.
But companies don't have to allow card check, and many prefer elections, where they feel they can better make a case to employees against unionization. Not surprisingly, Kinkisharyo refused to sanction the card check process in Palmdale. The union still could have tried to organize workers at the plant through the more traditional method of holding an election. Instead, things went awry.
A previously unknown local environmental group with ties to the IBEW sprang up in Palmdale and threatened to file a lawsuit challenging the adequacy of the environmental review for the proposed manufacturing plant.
The group demanded a full environmental analysis — where was the new plant, for instance, to get its water? — and pressed a case that, at a minimum, was likely to delay the project and potentially jeopardize Kinkisharyo's ability to meet its MTA delivery deadlines. Moreover, the company took umbrage at what it viewed as a pretext to pressure the company — “greenmail,” as one company representative called it. The two sides lobbed public statements at each other and growled in letters and in the press. And then, early last week, the company walked away: “We have no choice but to identify another location to perform this work,” it informed the city of Palmdale in a terse letter.
That won't be quite the end of it, of course. Kinkisharyo will still do assembly work in Palmdale as long as its MTA contract lasts and will still employ almost 200 people in its existing assembly plant, but the company says it's finished with the idea of a long-term manufacturing plant in the area. Labor leaders maintain that the company has an obligation under its contract to create these jobs in Los Angeles County, but the MTA disagrees. Officials at the agency say that while Kinkisharyo had committed to doing the rail car assembly locally, the agency cannot, under federal law, force the company to build in the area. Lawsuits already are being filed, and courts will sift through the arguments for months, maybe years.
But that's all squabbling over the wreckage. The undisputed fact is that a stubborn company and a stubborn union went to war, and because of it, the residents of Palmdale, who could have had a couple of hundred good new jobs, instead will be looking at a vacant lot. Who won that battle? No one. But there are plenty of losers, including California, Los Angeles County, Palmdale and the of men and women who would have built and staffed the manufacturing facility.