© Reuters. FILE PHOTO: A worker assembles parts of a Tundra Truck at Toyota’s truck plant in San Antonio, Texas, U.S. April 17, 2023. REUTERS/Jordan Vonderhaar/File Photo
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By Joseph White and David Shepardson
DETROIT/WASHINGTON (Reuters) – Leaders of the United Auto Workers signaled the next step in their campaign to capitalize on the union’s success in bargaining with the Detroit Three: launching organizing drives at Toyota (NYSE:), Tesla (NASDAQ:) and other nonunion U.S. auto factories.
“What could @Toyota workers win if they joined the #StandUpUAW campaign?” UAW organizing director Brian O. Shepherd posted on social media on Wednesday, commenting after Toyota agreed to boost wages for U.S. workers by 9%, and to cut in half the time it takes new hires to reach the top pay rate.
Other foreign automakers are reviewing recent auto-sector wage hikes. Honda (NYSE:) told Reuters it is evaluating the recent UAW deals with the Detroit Three automakers and will remain competitive.
UAW President Shawn Fain is expected to deliver a video address at 7 p.m. EDT (2300 GMT) on Thursday to outline details of the union’s new contract with Stellantis (NYSE:).
Fain has used recent video addresses to telegraph the union’s determination to organize workers at Toyota, Tesla and other nonunion U.S. automakers, using the record wage increases won in tentative agreements with Stellantis, General Motors (NYSE:) and Ford (NYSE:).
“One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said on Sunday. “When we return to the bargaining table in 2028, it won’t just be with the Big Three, but with the Big Five or Big Six.”
UAW Region 8 director Tim Smith, whose territory covers many nonunion auto factories in the southern United States, said workers at those plants have been reaching out to the UAW.
“You cannot believe the calls coming in,” Smith told Reuters.
UAW staff are keeping track of the calls, many from Toyota’s sprawling assembly operation in Georgetown, Kentucky. The Toyota complex is not far from one of the UAW’s largest local unions, which represents Ford’s Kentucky Truck and Louisville Assembly plants.
Smith said it was important workers consider the total wages and benefits and not just the wage rate. “We got them a raise,” he said. “If (Toyota workers) come calling, which they have, we’re going to educate them and be there for them.”
The UAW has tried and failed for years to organize nonunion U.S. auto factories, most of them built by Asian and European legacy automakers in southern U.S. states where so-called right to work labor laws make it optional for workers to pay union dues.
Recently, the union tried and failed to win enough support from workers at Tesla’s Fremont, California, factory to hold an organizing vote. Tesla’s Fremont plant was once a UAW shop when it was jointly owned by GM and Toyota and known as NUMMI.
“Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing?” Tesla Chief Executive Elon Musk tweeted in 2018.
The UAW filed a complaint with the National Labor Relations Board over that tweet, and the NLRB ruled the tweet violated labor laws prohibiting management threats against workers for supporting unionization. Earlier this year, a U.S. appeals court upheld the NLRB ruling.
WIDENING COST GAPS
The UAW’s organizing efforts from 2015 through 2020 were hindered by a federal investigation of corruption in the UAW’s top ranks.
Fain earlier this year won the UAW presidency by vowing wide-ranging reform.
Toyota’s move earlier this week to raise wages is in line with the strategy the Japanese automaker and other nonunion automakers have used to keep UAW organizers at bay.
Nonunion automakers have kept hourly wages close to the UAW rates at the Detroit Three. But they have lower labor costs overall because they pay less for health and retirement benefits than the unionized automakers. They also use more temporary workers, who are paid less.
The result is that average hourly labor costs in total at foreign automakers are $55 an hour, compared with $64 an hour under the old UAW contract, Ford sources estimated ahead of the new contract agreements. U.S. labor costs at Tesla are estimated at $45 to $50.
The gaps will get wider, assuming UAW workers at the Detroit Three ratify agreements that call for increasing pay for veteran workers by 25%, restoring cost-of-living allowances and boosting pay for temporary workers by as much as 150%.
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