The United Auto Workers' first-ever victory at a foreign automaker in the Southern United States represents a historic milestone for organized labor in a region historically resistant to unionization, especially in the manufacturing sector.
Indeed, we could be witnessing the beginning of a revolution in the U.S. auto industry, where no new automaker has unionized in nearly 50 years. The industry is currently divided almost evenly between unionized and nonunion workers at U.S. auto plants.
Workers at the Volkswagen plant in Chattanooga, Tennessee, ignored the pleas from six Southern governors who warned that unionization could jeopardize jobs and future investments.
The vote marks the UAW's first step in their ambitious campaign to organize workers at 13 nonunion automakers across the country, primarily in the Southern states. It also sets the stage for further battles between organizers and elected officials, as well as other forces resistant to labor campaigns.
Next on the union's agenda is a crucial vote at a Mercedes-Benz plant near Tuscaloosa, Alabama, scheduled to conclude by May 17. The outcome will significantly impact the landscape of labor relations in the region.
More Companies Targeted
But the UAW’s efforts won't stop with Mercedes. The union is working to organize workers at eight other foreign automakers: BMW, Honda, Hyundai, Mazda, Nissan, Subaru, Toyota, and Volvo. Additionally, they’re targeting the plants of three US-based electric vehicle manufacturers: Tesla, Rivian, and Lucid.
These companies employ about 150,000 workers—roughly equivalent to the combined unionized workforce of General Motors, Ford, and Stellantis.
"At this momentous gathering in Chattanooga, tonight marks a significant and historic achievement," Shawn Fain, president of the UAW told joyous workers on Friday. "Let's harness this momentum and continue our efforts to uplift the working class across our nation."
Fain has pledged to spend $40 million over the next two years to help workers organize nonunionized manufacturers in nonlabor-friendly states.
“Conditions are as favorable as they’ve been in my lifetime,” he told Automotive News recently.
Watershed Moment
A strong UAW presence in the South would disrupt the automotive industry's current landscape, where UAW contracts have led to higher labor costs for General Motors, Ford, and Stellantis compared to nonunion competitors such as Toyota, Honda, Nissan, Tesla, and Hyundai.
“This is a watershed moment for the industry,” said Harley Shaiken, a professor emeritus at the University of California, Berkeley, who followed the UAW for more than three decades. “It sets an example that would resonate across the industry, and across other industries where there’s a large presence of nonunion workers,” he told The New York Times.
“The business community in right-to-work Southern states has largely been immune to sustained, well-funded organizing drives. It appears those days may be numbered," Michael Lotito, co-chair of the Workplace Policy Institute at Littler, a law firm that advises employers on labor issues, told The Wall Street Journal.
Volkswagen employees who voted in favor of UAW representation expressed hopes that the union would assist them in securing higher wages and increased paid time off. Currently, the Chattanooga factory pays a top wage of about $35 an hour, less than the top wage of over $40 an hour paid to UAW workers at G.M., Ford, and Stellantis.
Established in 2011, the Chattanooga plant employs 5,500 individuals, with approximately 4,300 eligible to participate in the union election. The plant manufactures the VW Atlas, a large SUV, and the ID.4 electric vehicle. It is Volkswagen's sole facility in the United States and was previously the only VW plant worldwide without union representation.
VW Could Be a Unique Case
To be sure, the union had certain advantages in gaining support at Volkswagen, including backing from IG Metall, the influential German union representing autoworkers. German companies also have a strong tradition of empowering workers.
According to German law, worker representatives must occupy half of the seats on a company's supervisory board, akin to a board of directors.
Harry Katz, a professor and labor expert at Cornell University, noted the remarkable 84 percent turnout, suggesting it may have been influenced by the substantial raises and benefits that UAW workers secured through strikes against the Big Three automakers last year.
"At the same time, it's important to acknowledge that VW could be a unique case because VW management did not aggressively oppose unionization," Katz told The Washington Post.
A Tough Road Ahead
Looking ahead, workers at other plants targeted by the UAW may encounter significant resistance, echoing challenges unions have faced over the past three decades in the auto industry and other private sectors in the U.S., Katz said.
Katz also highlighted a decline in unionization among U.S. auto-parts suppliers, noting a stark decrease from 95 percent in 1950 to about 5 percent today.
Others cautioned that union organizers will encounter significant obstacles in the South. The UAW's success in Chattanooga marked its third attempt after initially losing a vote there a decade ago.
“The South has a very strong tradition of independence among workers,” said Arthur Wheaton, director of labor studies at the Cornell University School of Industrial and Labor Relations.
The upcoming vote at the Mercedes plant in mid-May is anticipated to be a more challenging endeavor compared to VW, which maintained a neutral stance during the vote.
Mercedes has conveyed its respect for workers' right to organize and emphasized the importance of making an informed decision. However, in a January letter to employees, Mercedes cautioned that union organizers "cannot guarantee you anything."
"Mercedes is conducting a much more aggressive anti-union campaign compared to Volkswagen within the plant," John Logan, a labor professor at San Francisco State University told Reuters.
Despite this, the substantial victory at VW, where 73 percent of eligible workers voted in favor of unionization, is expected to significantly boost organizing efforts at other plants in the South.
"This will give them a huge boost for the Mercedes vote, and if they win that one, too, I wouldn't be surprised to see elections at Hyundai, Honda and Toyota over the next several months," Logan said.
The UAW asserts that a "supermajority" of the approximately 5,200 eligible workers at the Mercedes assembly plant in Vance, Alabama, and a nearby battery plant in Woodstock support unionization. The UAW's policy is to pursue a vote once 70 percent of workers have signed union cards.
And certainly, politics will come into play. Governor Bill Lee of Tennessee, along with five other Southern governors, expressed concerns in a letter that the unionization efforts could negatively impact the region's thriving economic growth and result in job layoffs.
"We have a responsibility to our constituents to speak up when we see special interests looking to come into our state and threaten our jobs and the values we live by," the governors wrote. "A successful unionization drive will stop this growth in its tracks."
The Industry Shifts South
The automotive industry's significant shift to the South has been fueled by multibillion-dollar investments in new factories in states like Georgia, Kentucky, and Tennessee.
"Hyundai Motor revealed plans in 2022 to construct a $5.5 billion manufacturing complex for electric vehicles in Georgia," while "Ford said in 2021 that it planned to create a $5.6 billion campus in Tennessee to make EVs and batteries."
In addition to automotive investments, Southern states have attracted "EV battery factories, semiconductor plants, and other manufacturing ventures."
Southern states' "right to work" laws, along with political and cultural factors, have posed obstacles to union expansion, though some experts believe that attitudes among workers are evolving, particularly with younger individuals entering the workforce.
Under right-to-work laws, workers are not obligated to join a union as a condition of employment.
In Tennessee, the union membership rate was 6 percent of workers in 2023, compared to the national average of 10 percent across the U.S., according to Bureau of Labor Statistics data. Similarly, in Georgia, the union membership rate was 4.6 percent, while in South Carolina, it was 2.3 percent.
Surge of Public Support
The National Labor Relations Board (NLRB) reported a 35 percent increase in petitions for union elections in fiscal year 2024 compared to the previous year. Gallup polling also indicates a surge in American support for unions, reaching 67 percent after hitting a record low during the Great Recession.
Despite these trends, the labor movement continues to face challenges. Only 10 percent of U.S. workers were unionized last year, a historic low exacerbated by workforce growth.
Unions are experiencing a resurgence following years of declining membership. From 1983 to 2023, the percentage of U.S. workers in unions dropped by 10 percent. However, there is a growing public support for unions.
Recent Developments
Efforts to organize workers at various companies, including Amazon and Starbucks, have gained significant attention. Developments this past week include:
Workers at a Mercedes-Benz factory in Alabama preparing to vote next month on unionization;
Disney theme park characters filing for a vote to join the Actors' Equity Association;
Pharmacists at CVS stores moving towards unionization.
Biden's Support
President Biden is actively advocating for organized labor. He opposed Nippon Steel's $14 billion bid for U.S. Steel after workers at the Pennsylvania-based company voiced opposition to the deal, ultimately gaining the endorsement of the United Steelworkers.
In a historic move last year, President Biden joined striking auto workers on a picket line in Michigan, subsequently earning the support of the UAW.
Biden has implemented industrial policies aimed at supporting workers, such as calling for increased tariffs on Chinese steel and aluminum to solidify support among voters who played a crucial role in his victory over Donald Trump in 2020.
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