Car Factories in the South Are Turning Union in Unprecedented Ways

Possibly foreshadowing a national trend, workers at Volkswagen’s factory in Chattanooga, TN voted overwhelmingly last week to join the United Auto Workers union. The first of America’s many “transplant” automobile factories to become unionized, the UAW victory at the Chattanooga Assembly Plant follows on the heels of the resurgent union’s gains won in its “Stand Up Strike” against Detroit’s Big Three last Fall. It also comes despite the vocal, organized opposition of six state governors with non-union auto plants in their states and in the wake of two previous failed attempts to unionize VW’s U.S. manufacturing operation.

Days before the UAW declared victory in Tennessee with a rousing 73 percent of the vote, another union election was certified by the National Labor Relations Board for a vote at Mercedes-Benz’s facility in Vance, AL, scheduled for May 13-17. Along with the union’s latest drive to organize many of the other non-union plants dotting the so-called “right to work” states of the American South, news that some 96 percent of the already-unionized workers at Daimler Trucks North America plants in North Carolina, Georgia, and Tennessee voted to authorize a strike should negotiations fail when their contract expires later this month.

With further inroads, the union could dramatically reshape the role of labor in determining wages and working conditions, extending a broader trend that has seen workers in other industries staring down their employers to get a bigger piece of the pie. “The workers at VW are the first domino to fall…They have shown it is possible,” the UAW’s newly elected president Shawn Fain told The Guardian after the vote’s tally. “I expect more of the same to come. Workers are fed up.”

Meanwhile, carmakers with non-union factories have been pulling out all the stops to fend off the union push, arguably already the most successful in half a century.

When, for instance, was the last time your boss gave you an unsolicited raise? I sure can’t remember when I last saw one, with a strong possibility of never. But, in recent months, several non-union carmakers—including Toyota, Honda, Tesla, Nissan, Subaru, Volkswagen, and Hyundai—have done just that, giving workers in their U.S. factories surprise wage hikes and improved benefits. At least one maker, Mercedes-Benz, has even pledged to gradually eliminate the two-tier wage structure that became popular among carmakers, including foreign-owned “transplant” manufacturers, following the 2008 recession, wherein new hires, often classified as temporary, are paid substantially less than existing employees.

The wage hikes and other gratuitous sweeteners from the non-union companies are generally not as big as their unionized counterparts received. The payouts for long-time UAW workers saw record hourly gains of 25 percent while more recent hires and temporaries evened up big-time with wage hikes of more than 100 percent, along with the reinstatement of regular cost-of-living adjustments taken away during the Recession. Non-union raises have come in more along the line of 10 percent, which isn’t nothing but doesn’t fully address years of wage deflation due to inflation or come close to matching what the Detroiters will be paying their workers.

UAW Looks To Unionize Tennessee Volkswagen Plant

Crucially, though, as a further bonus for the UAW and others wishing to restore trade unions to their former prominence, the Detroit strike proved exceedingly popular with the public, with polls showing 75 percent of Americans supporting the strikers, and one finding that under 10 percent of the population favored the car companies during the work stoppages. The union’s campaign highlighted the enormous rises in compensation top company executives have enjoyed in recent, highly profitable years, all while workers’ wages remained in the doldrums. After the strike, which Ford CEO and President Jim Farley warned might bankrupt the Blue Oval, it turned out his generous 2023 compensation package totaled almost $27 million. That’s a lot of money–312 times the median total compensation of all Ford employees last year, up from 281 times in 2022–but not as much as the $29 million GM’s Mary Barra collected last year. Her desperate pleas that the union moderate its demands sat uneasily next to the 34 percent pay rise she’d received over the four preceding years. It was the same story with GM’s decision, to follow the strike with a $10 billion share buyback and an increased dividend for shareholders.

A scene of the UAW on strike in Michigan in September, 2023.

So why did auto workers win these record gains, both in union shops and beyond? A plausible theory has undoubtedly been that the UAW’s “Stand Up” strike worked. It helped the union make its case to workers at non-union plants they’d like to organize. It proved that the union can get things done, particularly under its new president, Shawn Fain, an electrician, and 30-year Stellantis (née FCA, Daimler-Chrysler and Chrysler) veteran.

Early proof of the union’s newfound appeal can be seen in recent “card authorizations”—a key step to union elections–by over 50 percent of the workforces at Mercedes-Benz’s Alabama and Volkswagen’s Tennessee car plants. These card authorizations led the UAW to petition the National Labor Relations Board for elections to certify the union, with a three-day vote at VW’s Chattanooga plant concluding with a victory last Friday and at Mercedes’ Vance, AL, plant not long after. They’re a portentous development given that both plants, deep in the non-union South, previously voted against UAW representation. News that some 96 percent of unionized workers at Daimler Trucks North America plants in North Carolina, Georgia, and Tennessee voted to authorize a strike should negotiations fail when their contract expires later this month.

UAW Looks To Unionize Tennessee Volkswagen Plant

At Volkswagen’s Chattanooga plant, two previous votes on unionization had failed, the most recent in 2019 by a slender 57-vote margin. But the success of a so-called “Stand Up Strike” waged against the Big Three energized workers has resonated in Chattanooga, said Yolanda Peoples in a phone interview with Road & Track, an engine dress worker on the line at Volkswagen’s plant there. She moved from Atlanta to join the company at the newly opened factory 11 years ago.

“A lot of people weren’t familiar with the UAW and what was possible being a part of it,” People said. “[The 2023 strike] brought to light what we can have at our plant, and it made people more aware of the changes that could be made.”

Peoples, 41, said the union’s deliberate attempt to engage the media, the public, and the workers was impactful. Demographic changes have helped, she said, as younger workers appear more open to the idea of a union.

“But the biggest push was the Big Three contracts. A lot of people that were there since I’ve been there, who were strictly ‘no union,’ are saying ‘Well, let’s give it a try. We’ve been around a long time and things haven’t gotten any better… Now we see what can get changed.’”

According to observers, the union’s last unsuccessful drive at the VW plant in 2019 was marred by congenitally weak national leadership—“company unionism” Fain calls it—and meddling not just by Volkswagen’s American management but by state and local politicians, including then Tennessee governor Bill Lee, a Republican who visited the plants as the vote drew near to suggest that future investment in the plant—built with close to $1 billion in state and federal incentives, the richest corporate subsidy in Tennessee history would be cut off. Volkswagen management at the time suggested in meetings with workers the new plant might be shuttered entirely were the union to triumph. Workers reported harassment for wearing pro-union buttons and shirts, while sporting anti-union apparel reading “One Team: I Am Volkswagen” was encouraged.

Los Angeles Auto Show Previews Latest Car Models

Peoples recalled how during the 2019 campaign, VW brought former plant CEO Frank Fischer back to Chattanooga, this time to lobby against the UAW. Fischer (pictured above, left) had been popular with workers—unlike his successor—before returning to Germany in 2014.

“He was a great guy, very personal with all the employees, asking about our families and things. So, when they brought him back and he said, ‘Give Volkswagen one more chance to make things right,’ people really believed it, and that swayed a lot of people to vote no.”

Fischer repatriated to Germany immediately following the union’s defeat, however, Peoples said, conditions did not improve. As noted in multiple media reports, workers, for instance, do not get any paid sick days. However, in 2023, while the union negotiated with the Detroit makers, VW announced unexpected cost of living adjustments. “In other times when they discussed [COLA,] there was never enough money in the budget. But now, you have UAW pushing for these contracts with the Big Three, and then all of a sudden we’re getting a raise. [The strike and the COLA] just went hand in hand.”

Volkswagen declined to discuss its U.S. labor situation but a spokesperson, Michael Lowder, wrote in an email to Road & Track.

“Volkswagen is proud of the 5,500 employees who power our world-class assembly plant in Chattanooga. Our culture is built on frequent, transparent, and two-way dialogue with employees. We respect their democratic right to determine who should represent their interests in the workplace without interference, intimidation, or misinformation from outside parties.”

Nevertheless, as the election draws near in Chattanooga, the state’s Governor Lee has once again voiced his opposition to unionizing Volkswagen, which he said would be a “big mistake.” And, reported Luis Feliz Leon of Jacobin, “Hamilton County mayor Weston Wamp was permitted to call a press conference (on April Fool’s Day) outside VW’s plant to announce that ‘the UAW is a sinking ship.’” They were hardly alone among the elected “right-to-work” crowd, with five other governors with transplant automakers in their states decrying the UAW and its organizing activities.

UAW Looks To Unionize Tennessee Volkswagen Plant

Down in Vance, AL, Mercedes insists it’s keeping quiet and minding its p’s and q’s on the unionization front, as the law requires. A Mercedes spokesperson, who requested not to be identified, wrote in an email “Mercedes-Benz U.S. International has a strong record of success over the past 25+ years operating as One Team in Alabama. Central to our success is our positive team culture that includes an open-door policy. MBUSI has a proven record of competitively compensating Team Members and providing many additional benefits. We believe open and direct communication with our Team Members is the best path forward to ensure continued success.”

A Mercedes supply chain leader, who feared retaliation and wished to remain anonymous, told Road & Track that the company recently arranged for the legendary Alabama football coach former, sports announcer, and car dealership owner, Nick Saban, to visit the plant. There, he addressed the workforce on the urgent need “to become one team and work together to get what we need. He didn’t mention the union,” the Mercedes employee remembered, but then he didn’t have to. Meanwhile, area politicians have stepped up on the company’s behalf, with Governor Kay Ivey tossing off a recent op-ed slamming the union’s organizing drives at Mercedes and Hyundai. “The Alabama model for economic success is under attack,” she opined, calling the drive an assault one of the state’s “crown jewel industries.”

“She’s damn right it is!” Fain replied. “It’s under attack because workers are fed up with getting screwed.”

UAW President Shawn Fain Testifies In Senate Hearing

The Mercedes supply chain manager hastened to add that he didn’t think that unions were necessarily relevant or needed the way they once were, but also said, “I don’t feel that management is working with the team members directly on their issues and their concerns. Everyone in Alabama, in manufacturing, has felt inflation. I think [management’s] idea of what workers are worth is a little touch out with reality now. I totally get where people are frustrated with huge payouts [to executives]” while pleading poverty.

The situation is further muddied, he opined, by a lack of transparency, calling out the fact that “Mercedes Benz Vance is technically Mercedes Benz US International, which is not a public company. So, we can’t look at their financials. And if you go look at the official report from Mercedes Benz Germany, you see Mercedes Benz cars as a whole. You see Mercedes Benz vans and Mercedes Benz Mobility. Globally. But that’s it. So the true financial picture of this plant is unknown to the majority of workers and management. I honestly think that the higher-level management, the C-Suite, and VPs are not in touch with the reality of this workforce. I think having almost exclusively German managers, people that have been here for way too long, is hindering their ability to be agile and create a good working environment.” He also cited the need for HR managers with a greater sensitivity to the reality of the factory floor.

Jeremy Kimbrell, 46, an unabashedly pro-union mill operator who collects precision measurements of freshly pressed body parts at the Vance plant marks 25 years with Mercedes Benz this year. He’s seen “four or five” previous unionization drives fail. This time, he thinks, things may well be different

“If we could vote today, it’d be a blowout. But you know as well as I do, it doesn’t always work that way. The company is in the middle of a pretty serious anti-union campaign.” He cited small raises – including one for eighty cents an hour – among recent concessions driven by the strike up north. But, as the union drive gathered steam, he said, the company’s mood changed.

“They gave us about six weeks to campaign without interference. And I thought they were going to commit to that. But once we announced we had 30 percent [card authorization,] it was like flipping a switch—they kind of lost their minds… They put out videos by upper management that gets put on the app we get all our company memos from, and then we had ‘all team’ meetings every worker must attend,” where plant managers cited the small raises and adjustments to bonus payouts. “They told us the UAW was no good and couldn’t help us. ‘They’ll just try to take your money in dues and they can’t help you here.’ That was from the CEO. Then they gave us all an additional $2-an-hour raise and did away with two tiers. They kind of pulled out all the stops, but really all that did was open the workers’ eyes. They’ve got plenty of money, but let on like they don’t.” He noted a recent $3.2 billion share buyback and dividend bump as proof of Mercedes’ ability to do better.

For his part, Fain predicts a win at Mercedes. Speaking with The Guardian, Fain said “[a]t the end of the day, I believe that workers at Mercedes definitely want a union, and I believe a big majority there will vote in favor.”

Wages typically constitute 5-7 percent of the cost of an automobile, according to the union. But Mercedes, like the rest of the industry, seems to think “living in Alabama gets you a discount,” said Kimbrell “‘It’s Alabama, we’re just a bunch of dumb hicks down here.’ So even though it’s the same work, building cars, it takes the same things to build the car, no matter the emblem on the hood, but [if] you live in Alabama, you deserve less money. That’s ridiculous.”

Among the companies’ anti-union arguments, the corruption convictions of UAW leaders is “an issue that is brought up a lot,” VW’s People’ said. “How I feel about it is, I was at Volkswagen during the diesel corruption scandal, too, and we were scared at Chattanooga; we didn’t know if we’d still have our jobs. [Volkswagen reportedly lost over $30 billion in the wake of what was quickly dubbed Dieselgate.] But the UAW handled the corruption scandal very well. They prosecuted the people involved and got rid of them. Now we have a new leader. I feel as though we forgave VW for the diesel scandal and gave them a second chance. And we’re willing to give the UAW a second chance. Hopefully they’ve made things right as well.”

“This is what you do with corrupt union leaders,” Kimbrell concurred. “You vote them out, or you lock them up. When you’re head of something like a union, man, you’re taking a responsibility that is just unbelievably important. And when you take advantage of that, there’s no punishment harsh enough to suit me.”

UAW Looks To Unionize Tennessee Volkswagen Plant

Despite the former president’s stance against the union, VW’s Peoples concedes some workers will support Donald Trump in November’s presidential election. Trump spoke out bitterly against the union during its Big Three strike, calling union president Fain, a “weapon of mass destruction.” Fain has called Trump a representative of the “billionaire class.” The stakes are undoubtedly high, too, as the President sets the tone and direction of national labor policy, appointing members to the National Labor Relations Board, the federal agency charged with regulating union elections and enforcing laws governing the right to organize. The union’s membership – which has dwindled from 1.5 million in the Seventies to its current 380,000 — remains an important bellwether of working-class sentiment.

But Peoples doesn’t see the MAGA movement as hurting the UAW’s chances of unionizing the plant. “Whatever political side that they go for, it has nothing to do with what’s going on inside the plant,” she said. “And that’s what we’re really fighting for, to change what’s going on right here.”

Kimbrell agrees. “It’s like a guy told me not too long ago, ‘You know, Mercedes is screwing a lot of Republicans. So why would I not want a union to do something about it?’ Employees are going to vote for who they’re going to vote for. But when it comes to how we’re getting treated at work—pay, benefits, work rules, the total package—and politics? We don’t want any politicians involved. We don’t have any politicians down here on our side. It’s us workers together and we ain’t studying the politics. Let people vote for who they want to vote for. We’re going to handle our business to take care of each other.”