Advertisement
Australia markets open in 51 minutes
  • ALL ORDS

    7,975.10
    -64.80 (-0.81%)
     
  • AUD/USD

    0.6652
    -0.0006 (-0.09%)
     
  • ASX 200

    7,733.70
    -62.30 (-0.80%)
     
  • OIL

    81.68
    +0.05 (+0.06%)
     
  • GOLD

    2,344.20
    -0.20 (-0.01%)
     
  • Bitcoin AUD

    90,263.75
    -5,377.16 (-5.62%)
     
  • CMC Crypto 200

    1,248.88
    -60.84 (-4.64%)
     

What’s at stake in the union election at a Mercedes-Benz plant in Alabama

Michael Sohn/AP

A high-stakes union election is underway at a Mercedes-Benz plant near Tuscaloosa, Alabama, the only plant for the luxury automaker in North America.

The fallout will be significant whether the workers at Mercedes-Benz vote to join the United Auto Workers union or not. The UAW is hoping to carry its strong momentum right now, as its decision to use a “stand up strike” strategy hitting the Big Three automakers all at once brought unprecedented attention and record contracts for workers. And last month, it won a union election at a Volkswagen plant in Chattanooga, Tennessee, its first victory in three attempts to organize the factory.

Winning the Alabama vote would mean the UAW’s biggest push to grow its membership in decades will keep going. The UAW watched for decades as non-unionized factories owned by companies from Kia to Toyota to Tesla to Rivian popped up across the country, especially in the southern United States.

But under relatively new UAW president Shawn Fain, the strategy has changed.

ADVERTISEMENT

In an interview with Car and Driver, Fain said the profit margins for the Japanese, Korean and German automakers were “obscenely more gross than they were at the Big Three, and yet their workers get less.”

“I truly believe we’re going to see a huge shift this year. I think we’re gonna win in the South,” he said in the interview.

But a loss could stall those efforts — and reaffirm the South’s reputation as a union-free, corporate-friendly region.

In November 2023, the UAW said it began an effort to organize workers at 13 non-union auto US factories. The effort included three US-based electric vehicle makers — Tesla, Rivian and Lucid — as well as 10 foreign automakers that build cars in the US — BMW, Honda, Hyundai, Mazda, Mercedes, Nissan, Subaru, Toyota, Volkswagen, and Volvo.

The Mercedes-Benz plant in Vance, Alabama, near Tuscaloosa, has about 6,000 hourly workers. Voting is set to end Friday morning.

Mercedes’ response

In a statement, Mercedes-Benz US International said it “fully respects our Team Members’ choice whether to unionize and we look forward to participating in the election process to ensure every Team Member has a chance to cast their own secret-ballot vote, as well as having access to the information necessary to make an informed choice.”

But that doesn’t mean Mercedes would let its workers unionize without putting up a fight, as the company has used language and tactics common to corporations that are resistant to organizing efforts.

“We believe open and direct communication with our Team Members is the best path forward to ensure continued success,” the statement said.

In a separate statement, MBUSI said that it “has a proven record of competitively compensating Team Members and providing many additional benefits.”

And the company is allegedly pushing back against unionization efforts in other ways, according to six unfair labor practice charges filed by the UAW.

The National Labor Relations Board said it is investigating six unfair labor practice charges filed by the UAW against Mercedes-Benz since March. Those charges allege Mercedes has disciplined employees for discussing unionization during work, prohibited distribution of union materials, surveilled employees, and forced employees to attend “captive audience meetings,” which is a mandatory meeting during work meant to discourage unionizing.

Mercedes-Benz US International denied these claims, and said in a statement it “has not interfered with or retaliated against any Team Member in their right to pursue union representation.” It continued, “We do not believe these claims have merit and we look forward to presenting our case to the NLRB.”

Building off momentum

Last month, hourly workers at Volkswagen’s plant in Chattanooga, Tennessee, overwhelmingly voted to join the UAW — 73% of the 3,600 workers at the plant who cast ballots had voted to join the union.

The victory didn’t come easy for the UAW. Volkswagen didn’t win until its third union drive, said Art Wheaton, director of labor studies at Cornell University School of Industrial and Labor Relations’ Buffalo office. And this is the Mercedes plant’s first strong push.

“It’s not a catastrophe if they don’t win (the first time). Primarily because they’re facing a very active Mercedes Benz trying to block them from organizing, you got governors in the South trying to block them from organizing, and they don’t have the same track record or history or infrastructure in Alabama,” Wheaton said.

Even more broadly, unions have enjoyed a successful run — they won pay increases of 10% or more for nearly a million union members last year, according to an analysis by CNN. Strikes were at a decade high in 2023, and organizing activity also increased.

“Labor has something to bring to the table. You see the successes at the bargaining table. It makes people more aware that the union may have something to offer,” Wheaton said.

Why this election matters

This election has huge implications for the UAW’s organizing efforts beyond the Big Three unionized automakers – GM, Ford and Stellantis. The South has a much lower level of union representation than workers in industrial regions in the North.

But a labor expert says a loss would not be the end of the UAW’s efforts in organizing in the South.

“It’s not horrible if they lose, because it gives the UAW the chance to see where they’re at. They can gauge how much support they have,” Wheaton said.

There are about 150,000 workers at nonunion auto plants in the United States today. That’s roughly the same amount of workers represented at the Big Three.

The UAW is at the point where more than a majority of autos that are sold in the US are assembled and produced in plants that don’t have UAW representation, which weakens their bargaining power at the Big Three, Harry Katz, professor of collective bargaining at the Cornell University School of Industrial and Labor Relations said.

Since 1990, the South’s share of auto jobs has doubled from around 15% to 30% today, according to S&P Global Market Intelligence. Meanwhile, the Midwest’s share has declined from 60% to 45%.

“So much of auto production is occurring in plants not represented by the UAW. The management then threatens to move production to those other sites,” Katz said.

A lot at stake

Katz said a win would not be a bellwether event, and the consequences of the union losing the vote will be even greater than the positive outcome if they win, he said.

“It would be an important victory, but it wouldn’t signal that there’s necessarily signs that unions are going to have a cakewalk, an easy path to winning in either the other transplants or in many other organizations,’” Katz said.

Though a union win could generate momentum, it doesn’t mean a victory will mean other plants can overcome management opposition at other foreign-owned plants. Non-union automakers have already begun their response to the big union victories thus far.

Toyota, Honda and Hyundai all announced raises for their US factory workers within two weeks of tentative contract agreements with Ford, General Motors and Stellantis. And workers at those plants might be content with the non-union status they’ve worked under already.

“Those plants’ management has a lot of communication engagement strategies that –rightfully or not – seem to satisfy the worker,” Katz said, who said those workers are already earning significantly more than their local labor markets.

And there is pressure from local politicians as well.

Six southern governors from Alabama, Georgia, Mississippi, South Carolina, Tennessee, and Texas issued a joint statement in April discouraging the union campaign, warning it could put workers’ jobs, as well as the auto industry in the South, in jeopardy. The statement came a day before workers at Volkswagen voted on joining the UAW.

“The reality is companies have choices when it comes to where to invest and bring jobs and opportunity. We have worked tirelessly on behalf of our constituents to bring good-paying jobs to our states. These jobs have become part of the fabric of the automotive manufacturing industry,” the statement said.

CNN’s Chris Isidore and Nathaniel Meyersohn contributed to this report.

For more CNN news and newsletters create an account at CNN.com