Teamsters-commissioned report distorts Cummins’ labor activities

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Teamsters-commissioned report distorts Cummins’ labor activities

21 August 2007

The Business & Human Rights Resource Centre invited Cummins to respond to a report commissioned by the International Brotherhood of Teamsters and written by Cornell University Senior Lecturer Lance Compa, “Every Abuse - Violations of International Labor Standards by Cummins”, available at:
Cummins provided the following response:
On August 2, the International Brotherhood of Teamsters released a report written by a Cornell University professor that alleged “violations of international labor standards” by Cummins Inc. The focus of this report – which was commissioned by the Teamsters – is labor relations at the North American distributors of Cummins.
Cummins was not contacted by the Cornell University professor or anyone else to provide facts for this report or to respond to any allegations, yet the author seems intent on portraying the Company as a serial violator of “international labor standards” based almost solely on information provided by the Teamsters.
The Company strongly disagrees with the allegations contained in the report. Any claim that Cummins has violated labor laws or standards with respect to its North American distributor joint ventures is completely false and shows a lack of understanding of the Company’s practices and values.
Moreover, the idea that Cummins Inc. is unfair to unions or its workers is completely unsupported by the facts – as is the notion that Cummins Inc. has undertaken an orchestrated campaign to stamp out union representation at its North American distributors.
Cummins also takes exception to the report’s inference that workers’ only shield against abuse is union protection – in this case Teamsters membership. Cummins provides fair pay, good benefits and safe working conditions for its employees in all its facilities, union and non-union alike, and has consistently been recognized as a responsible employer around the world.
The author offers a one-sided account of issues involving labor relations at Cummins distributors aimed not at finding the truth but rather “proving” a pre-conceived hypothesis. Much of the language and the details of the report – including a graphic account of the suicide of a distributor employee nearly a decade ago and before Cummins has an ownership interest in the distributor – appear meant to inflame rather than inform.
Additionally, the author equates alleged labor standards violations at Cummins distributors with “human rights abuses,” an irresponsible claim that diminishes not only the horror of true human rights tragedies around the world, but also the credibility of his claims against Cummins.
Prior to 2002 the Cummins distribution network in North America was run primarily by independent distributors. Beginning in 2002, Cummins Inc. began consolidating smaller distributors and taking partial ownership positions in the newly formed companies. This was done to better serve our customers and increase the performance of the distributors.
These new joint ventures are run by a distributor principal, and Cummins Inc. does not have day-to-day management responsibility for these companies. Many of these locations have employees represented by unions, including the Teamsters, and the distributor companies regularly work with these unions to provide competitive pay and benefits to employees.
The Cummins North American distributors have followed, and continue to follow, the law when dealing with the unions and employees. When the new companies are formed, the distributor recognizes the collective bargaining agreement in place when the agreement calls for the new entity to assume the existing contract.
About 20 locations represented by the Teamsters have been involved in recent distributor consolidations. The new distributor assumed the existing collective bargaining agreement in nearly half of these locations. At the remaining locations, the former collective bargaining agreement did not apply to the new entity under the law, and new contracts were negotiated between the distributor and the union.
It is true that the new distributors and the unions, including the Teamsters, do not always agree on every issue raised during bargaining. For example, in the case of some Teamsters-represented locations, pension and health care funding became points of contention during contract negotiations.
In some cases, the Teamsters have wanted the new distributor to join Teamsters’ pension plans that were underfunded or posed a high risk. The distributors, and Cummins Inc., believe strongly that providing retirement benefits for workers is important and the means for providing these benefits must be safe and secure.
One of the most surprising positions taken by the Teamsters is its complaint about the number of decertification petitions that employees have filed at distributors in North America. A decertification is initiated when the employees contact the National Labor Relations Board and ask to have an election to determine whether the employees still want to be represented by the union.
Federal law prohibits employer involvement in the filing of one of these petitions, and the entire process is run by the National Labor Relations Board with strict rules that each side must follow. In some cases, employees at distributor locations represented by the Teamsters have decided, through a secret ballot election, to no longer be represented by the Teamsters.
Rather than to accept the fact that employees have freely decided they are better served by not being represented by a union, the Teamsters is trying to blame the distributor or Cummins Inc. for somehow facilitating these decertifications. In short, the Teamsters would rather blame someone else than address their many and well documented reasons for declining membership.
The assertion by the report’s author that Cummins should adopt a position of “neutrality” in such cases is disingenuous because it suggests that employers should sit on the sideline and simply trust that union organizers will make a balanced case to employees.
Cummins believes employees deserve to have all the facts before making a decision as important as whether to be represented by a union. The Company strives to provide that balance, all the while working within established rules regarding union decertification.

The unfounded allegations made by the Teamsters and in its report are disturbing to Cummins. While Cummins Inc. does not manage these distributors, it makes sure that these companies follow the laws strictly.

Finally, it is unclear to Cummins why the Teamsters have singled out the Company for such sharp, unfounded criticism. The Teamsters represent only a small fraction of the unionized workforce at Cummins distributors and have no other presence at Cummins Inc., which has constructive relationships with unions representing thousands of employees around the world. Those numbers have grown in recent years as the Company has grown.
Cummins’ reputation as a responsible corporate citizen speaks for itself. The Company has the best interests of all its stakeholders – including employees -- at heart in its actions and stands by its treatment of workers at its North America distributors.

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