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Volkswagen has become the latest foreign carmaker to raise wages for US workers following significant pay gains won by the United Auto Workers in a six-week strike against Ford, General Motors and Stellantis.
The German group’s 11 per cent pay increase means that three-quarters of non-unionised US car plants owned by traditional car brands have now raised wages since the deal, a pattern the union is calling “the UAW bump”. It has quipped on social media that its initials stand for, “You Are Welcome”.
VW on Wednesday will announce that it will raise wages for workers at its Chattanooga plant in Tennessee by 11 per cent from next month.
Japan’s Subaru said last week that it plans to raise pay at its Indiana plant, and is expected to detail the increase this week.
Nissan, this week, announced a 10 per cent pay rise for its US factory workers from the start of next year. Hyundai, which also runs a plant owned by sister brand Kia, said on November 13 that it will increase workers’ pay by 25 per cent by 2028, while Honda and Toyota have announced smaller increases. Toyota also said it will shorten the time it takes workers to reach the top pay grade from eight years to four, mirroring another UAW gain.
Volvo Cars, which has a plant in South Carolina, earlier this month told staff it will raise wages, a measure the company said it had planned since the spring.
BMW, Mercedes-Benz and Tesla all run non-unionised plants in the US and are yet to detail any increases.
Democratic senator Bernie Sanders noted the pay increases last week in a Senate subcommittee hearing, comparing the move to the raise Amazon offered its warehouse workers and drivers following a deal between the Teamsters this summer and UPS, which will raise workers’ pay by $7.50 an hour over five years.
“These historic union victories are not only improving the lives of union members, but that is beginning to spill over into the lives of non-union workers in America as well,” he said.
The UAW has said it plans to use its wins at the bargaining table against the traditional Big Three to lead organising drives at the US plants for non-union carmakers. The increases appear to be an attempt to forestall those efforts, but unlike the gains won by workers at Ford, GM and Stellantis, the increases at the foreign carmakers are not guaranteed by a legally binding contract.
Ford chair Bill Ford said last month during the strike that the company’s union employees should unite with management to compete against non-unionised carmakers, saying the dispute “should not be Ford versus the UAW. It should be Ford and the UAW versus Toyota and Honda, Tesla and all the Chinese companies that want to enter our home market.”
But UAW president Shawn Fain replied that no alliance existed between Ford and its unionised workers, rather “it’s autoworkers everywhere against corporate greed . . . Workers at Tesla, Toyota, Honda and others are not the enemy — they’re the UAW members of the future.”
Fain laid out further recruiting plans at the subcommittee hearing chaired by Sanders, saying the union would primarily target plants in the south. Many foreign carmakers are located in southern states because they have passed right-to-work laws, which drain union resources by allowing employees who are represented by a union to decline to pay dues.
US law hamstrings organising efforts because it allows employers to punish union leaders with minimal consequences and to hold mandatory meetings where workers must listen to anti-union messages, according to the left-leaning Economic Policy Institute. Earlier UAW efforts to organise in the south met defeat at Nissan’s plant in Mississippi and VW’s in Tennessee, while in February, 18 workers at Tesla said they were fired for organising a union drive.
But the UAW already has established virtual sign-up sheets at Action Network, a non-profit that provides tech tools for progressive causes, to collect the names of workers at Toyota, Honda, Subaru and Tesla who are interested in forming a union. Fain said “thousands” of workers have already contacted the UAW and signed union cards.
“We are going to organise like we’ve never organised before, because our strike has shown the Nissan worker in Alabama, and the Volkswagen worker in Tennessee, and the Toyota worker in Kentucky, and the Tesla worker in California that when union members win, the entire working-class wins,” he said.