"Intentional Fallacy"

I think this is a classic strawman fallacy or at least a version of it. They are not addressing the argument (falling behind because of the union) but instead changing the argument to something like "unions are bad".

I think the righteousness fallacy fits pretty well here. Person 2 assumes that, since the union's stated purpose is to protect workers, that its solutions are always going to be the best ones.

That said, how a union's actions affect a company's ability to be competitive is a lot more complicated and situational than either person in the argument seems to acknowledge. There have been situations where a unionized workforce has made it difficult for a company to compete with foreign competitors, but also ones where it's made the workforce more productive and ultimately been a net positive for the company.

With regards to blocking the adoption of a new technology, the most likely reason a union would do that is because the technology has the potential to displace a lot of employees. Whether that's a worthwhile tradeoff requires some deeper analysis. One of the hot topics now is the widespread adoption of AI in the workplace. Critics of AI point out, not just that companies are using it to replace human workers, but that it's less creative, less versatile, and more prone to mistakes than a person, so companies that replace humans with AI may not even be giving themselves a competitive advantage by doing so. There's also the possibility that the union is just using the technology as a negotiating chip, and will offer to stop fighting it in exchange for some improvement to the contract.

Always check your premises. While some analyses take them at face value, I consistently challenge their validity. For instance, consider the claim, “The purpose of a union is to protect workers!” This may be the public-facing slogan, but what if the true motive is to amass wealth and power for union leaders? Uncovering this hidden agenda reframes the core question from “How could you argue against that?” to a more critical examination of motives and outcomes. It also keep the discussion focus.