Tens of thousands of people who work for Toyota in Kentucky, Mercedes-Benz in Alabama or Tesla in Texas are technically not involved in the high-stakes negotiations taking place between labor and management in and around Detroit.
But they are very much a presence.
Executives at Ford Motor, General Motors and Stellantis, Chrysler’s parent, invoke non-union automakers, many of them in the South, as a competitive threat that makes it impossible for them to meet the demands of striking workers at major corporations. raises, more generous benefits and better working conditions.
“Toyota, Honda, Tesla and others love this strike because they know the longer it goes on, the better it will be for them,” Bill Ford, CEO of Ford Motor, said in Michigan last week. “They will win and we will all lose.”
The United Automobile Workers union sees such statements as an attempt to pit workers against each other. He sees the strikes, entering their sixth week, as a first step toward better wages not only for UAW members but also for the non-union workers he plans to recruit in the future.
“We will not be used in this phony competition,” Shawn Fain, president of the UAW, said Friday in reaction to Mr. Ford’s speech. And he added: “Non-union autoworkers are not the enemy. “Those are our future union family.”
The wage gap between unionized and non-union factories has long been a point of contention. Some industry executives have argued that high union wages were one of the main reasons GM and Chrysler had to resort to bankruptcy after the 2008 financial crisis.
Union leaders and progressive lawmakers have asserted that the growth of non-union manufacturing, primarily in the South but also in the Midwest and West, has helped erode the middle class in recent decades.
Veteran union autoworkers tend to earn more than production workers who are not represented by unions. They often have more say in their schedules and overtime.
But starting pay at Ford, GM and Stellantis factories can be lower than at non-union factories. And the pay of non-union workers at Southern auto plants tends to rise because the cost of living there is lower than in the Midwest.
Even the geographic division between union and non-union plants is not always as clear as it seems. Toyota and Honda have plants in the South, where unions are weak, but they also have factories in Ohio and Indiana, where unions are stronger. And GM and Ford have union operations in Kentucky, Tennessee and Texas.
The debate over auto industry wages has become more urgent as automakers invest billions to build factories to produce batteries for electric cars. Most of those factories are being built in southern states, such as Georgia and Tennessee, where local laws make it difficult for unions to organize a factory.
“A good deal with the Detroit Three would be powerful because it gives union organizers better arguments to join the union,” said Ian Greer, a Cornell research professor who studies the effect of electric vehicles on workers.
Even with a union wage of nearly $32 an hour for his job assembling chassis at a Ford factory in Chicago, Schataan Lyke said he didn’t have it easy. She is the sole breadwinner in the family of three children and is worried about how to get a party dress for the eldest.
Ms Lyke, who has been on strike, said she was pleased to have the union’s support. “You have someone out there fighting for you,” she said.
But Lyke, 37, has it better than others doing similar jobs in the South. At a Nissan factory in Canton, Mississippi, Morris Mock, 49, makes about a dollar less per hour than Lyke, even with more than 20 years of experience, he said.
An attempt to unionize Nissan in 2017 failed to gain enough support from workers. That means Mock, one of the people who led the union drive, will not directly benefit from the contract the UAW signs with automakers. But he said he was glad the union was fighting to protect wages as the industry shifted to electric vehicles.
“The market is about to change,” Mock said. “I’m glad they understand that we have to put workers first.”
Government statistics suggest wide regional wage gaps. Michigan autoworkers earn 22 percent more than production workers in Tennessee, 23 percent more than workers in South Carolina and 28 percent more than workers in Alabama, according to a survey by the Office of the Census. Those figures include people who work for suppliers, where wages are typically lower than in factories that assemble vehicles.
Some labor experts said the biggest difference between unionized and non-union autoworkers had less to do with pay and more to do with things like mandatory overtime and shift scheduling. Unionized workers tend to have more of a say in those matters.
The auto industry has been moving south for decades, attracted by lower costs, weak unions and local government incentives. Foreign automakers have often chosen sites in the South when setting up factories in the United States. BMW and Volvo Cars have factories in South Carolina; Mercedes and Hyundai in Alabama; Toyota in Kentucky; and Volkswagen in Tennessee.
Most foreign automakers do not disclose what they pay their workers. Volkswagen, an exception, said the starting wage at its factory in Chattanooga, Tennessee, was $21.10 for hourly production workers. Veteran workers earn more than $29, the company said.
Foreign automakers concentrated in the South sometimes pay their American workers more than Ford, GM and Stellantis, according to an EY study for Autos Drive America, an industry association that represents Nissan, Toyota, Mercedes and others.
The average starting wage at foreign automakers was $19 an hour, the survey found, more than the $17 starting wage for UAW members. But the average top salary at foreign automakers was $28, compared to $32 for UAW members under the current contract.
A Nissan spokesman declined to say how much the company pays its American workers, but said the average was higher than reported by the Autos Drive America survey.
Tesla, which is headquartered in Texas and has factories there and in Buffalo; Fremont, California; and Sparks, Nevada, doesn’t disclose what it pays its workers, but Detroit automakers say it’s less than what they pay.
Ford has said its labor costs, including benefits and bonuses, are 40 percent higher per worker than Tesla’s. That figure does not include stock awards that at least some Tesla employees receive. On Tesla’s website, job ads for a production associate pay between $20 and $23 an hour.
Even if autoworker pay in Alabama or Mississippi is less than in Michigan or Illinois, it is often more than employers in other industries in those places pay.
Working conditions are often a bigger problem than pay, labor representatives say.
In February, Emily Erickson of the University of Warwick in England and Berneece Herbert of Jackson State University published a survey of 211 workers at the Mercedes factory in Vance, Alabama, near Tuscaloosa.
Workers reported earning an average of $27 an hour at Mercedes, a high level for the region. But they said they were forced to work overtime or change their work schedules without notice. Almost half worked more than 50 hours a week. The study also found that white workers earned an average of $3 more per hour than black workers.
Mercedes denied that she discriminated. “Our pay structure is the same for all team members, regardless of race, age or ethnicity, and our pay progressions are based on seniority,” the company said in a statement.
He noted that the company employed 6,000 people in Alabama, suggesting that the study sampled too few workers. “We do not agree with their conclusions,” Mercedes said.
The wage gap between the South and the North is sure to widen as Ford, GM and Stellantis agree to new contracts with the UAW. The union is demanding a 40 percent increase over four years. Ford, GM and Stellantis have already offered raises of 23 percent and could go higher.
Unions have made some progress in the South recently. Workers at Blue Bird, which makes school buses in Georgia, voted to join the United Steelworkers in May and are negotiating a contract. Workers at ZF, which makes axles for Mercedes in Alabama, ended a month-long strike last week after the German company agreed to raise the maximum hourly wage to $23.
Union leaders say they have already received a flood of calls from workers at Toyota, Volkswagen and Hyundai who expressed interest in organizing unions. Volkswagen workers voted not to join the union in 2019, but this time the atmosphere may be different.
“These workers will say, ‘Look what the UAW did for these workers at GM, Ford and Stellantis,’” said Tim Smith, director of UAW Region 8, which includes the entire Southeast.
“We have organizers on the ground right now,” he said. “We’re starting to make our move.”
Ben Casselman and Bob Chiarito contributed with reports.
