United Auto Workers (UAW) President Shawn Fain is staying true to his recent promise. He is determined to unionize non-union auto manufacturers across America.
The UAW and the Detroit Three auto makers have recently reached new labor agreements that will remain in effect until April 2028. These agreements guarantee base wage increases of approximately 25% throughout the contract’s duration, along with additional benefits for workers.
Fain expressed his ambitious plans following this landmark victory, stating, “One of our primary goals is to embark on an unparalleled organization campaign. When we return to the negotiating table in 2028, it won’t simply involve the Big Three but also the Big Five or even Big Six.”
This means that companies like Toyota Motor, Tesla, Hyundai Motor, and others will face unionization efforts. The UAW provided an update on their progress in these new organizing initiatives.
“In an extraordinary endeavor, autoworkers at over a dozen non-union automakers have simultaneously launched campaigns across the nation to join the UAW,” announced a section of the union’s press release. “This organizing drive aims to encompass nearly 150,000 autoworkers across at least thirteen automakers.”
Currently, there are approximately 150,000 UAW-affiliated employees at General Motors, Ford Motor, and Chrysler parent Stellantis. The union seeks to expand its ranks by an additional 150,000 members from non-union establishments.
Alternatively, a union may be formed by submitting unionization cards to the NLRB, indicating that at least 30% of workers are in favor of unionization. In such cases, a vote can also be scheduled.
Fain concluded the press release by addressing autoworkers without the benefits that come with union representation, saying, “To all of you working without the security of a union, your turn has come. You no longer have to live paycheck to paycheck or worry about meeting basic necessities while the company thrives. A better life awaits you.”
Together, the UAW envisions a stronger future for all autoworkers.
The Impact of Unionization Efforts on Auto Makers
Auto makers from Germany, Korea, Japan, and the U.S. are all mentioned in the update. Toyota and Tesla didn’t immediately respond to a request for comment about unionization efforts.
Uncertain Future for Unionization
It isn’t a slam dunk that the UAW will be successful. Toyota has announced wage increases in the aftermath of UAW negotiations. Tesla takes a different approach managing labor relations—it offers employees stock-based compensation.
“I disagree with the idea of unions for a reason that’s different than you may expect,” said Tesla CEO Elon Musk in an interview. Musk prefers a situation in which everyone “eats at the same table,” where workers and managers are in alignment. He added that many line workers at Tesla are millionaires thanks to the stock-based compensation.
Factors to Consider
There is, of course, more to work than money and other reasons employees sign union cards. Investors will be watching the UAW drives closely.
If unionization succeeds, it stands to benefit Ford and GM who pay more for labor overall than non-union auto producers. Quantifying the gap isn’t easy, but a reasonable guess is it amounts to $100 or $200 per vehicle. That doesn’t sound too significant, but auto makers typically make in the range of $2,000 per unit.
The Long-Term Impact
That couple hundred dollars makes a difference over time. It’s money that can be invested in technology and new products. Impacts of better profitability can be seen over long periods. The Detroit Three market share dropped from roughly 75% in 1980 to about 50% in 2007.
Shrinking businesses produced losses for the Detroit auto companies. Around 2007, before the financial crisis and the bankruptcy of Chrysler and GM, the UAW and the auto makers restructured labor deals helping the companies produce more consistent profits.