Friday, July 7, 2006 - Union Funding Backfires
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Organizations are beginning to use their power as shareholders in corporations as swords to force companies to engage in more appropriate actions as determined by the organizations. Specifically, there are non-profit organizations which request that shareholders assign their proxy vote to them so the non-profit can vote for corporate resolutions that are in the interest of the non-profit organization. For example, environmental groups obtain proxies of oil companies to vote on environmental measures while humanitarian organizations introduce and vote for international humanitarian requirements on similar companies.

There are others who use their money to invest in only "green" companies. These funds allow investors to director their money to socially responsible companies opposed to continuing to fund companies that do nothing but worry about the bottom line regardless of the long term consequences of their actions. Such green funds have not become a major aspect of the mutual fund families available to investors; however, they are gaining strength and are utilized by some investors regardless of whether the returns are as strong as other funds.

As organizations seek to use their money and financial power to influence corporate actions, it is a wonder why unions are funding the enemy. Wal-Mart is currently having its annual shareholders meeting. A resolution has been introduced to require Wal-Mart to publish the amount of money that it contributes to state and federal political campaigns. The irony is that the resolution was introduced by the Teamsters. Apparently, the Teamsters pension fund has invested in Wal-Mart and holds enough shares that it can introduce resolutions and garner support for such resolutions.

For a number of years the AFL-CIO, an organization the Teamsters used to belong to, has been trying to unionize Wal-Mart. Despite all of those years and all of the energy put into the process, it was not successful in unionizing even a single store. In fact, Wal-Mart violated federal law on a number of occasions when it closed stores in which it thought that it would lose a union vote. These efforts have been expensive for the unions involved in the unionization effort and have taken a significant amount of time and effort.

The question then becomes, if the unions are working so hard to unionize Wal-Mart, why is their pension funds investing in Wal-Mart? It may be profitable for the pension fund to invest in the stock, but isn’t it in the long term interest of the Teamsters to only invest in companies which are unionized or at least not adverse to unions? The Teamsters pension fund likely has a lot of money to invest into various companies. If it invested only in companies which were supportive of the Teamsters, then those companies would become stronger based upon having unions and being able to utilize union money. This in turn would allow these companies to become stronger and in turn, the Teamsters would become stronger.

Continuing to invest in companies that are adverse to their positions and existence only undermines the unions. If they continue to invest in companies that are not in their interest and the unions become weaker as a result because such companies become stronger, then the unions deserve to fail and become obsolete. Such failure will be because of their own actions, and we must reap what we sow.

My Personal Signature Heather™

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About Heather ™
I have suspeneded my blog site
I may come back to it at a later date
I am sorry that my blogs and site were not appreciated and lacked participation
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