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Are you weak? Toyota announces pay rise for its employees

2024-06-25 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)11/02 Report--

On November 1, Toyota North America announced that from January 1, 2024, most workers at American car plants would get a 9% raise, from $31.86 an hour to $34.80 an hour. At the same time, Toyota North America will cut the maximum wage for hourly workers by half, from eight to four years, and increase paid leave. Chris Reynolds, Toyota's head of human resources for North America, said in a statement that Toyota regularly reviews compensation to ensure that the company remains competitive in the auto industry.

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Behind Toyota's pay rise for its workers in North America is the knock-on effect of six weeks of strikes by UAW workers against the big three Detroit automakers.

Since September 15, UAW (United Auto Workers) has gone on strike to varying degrees against the three major Detroit car companies, resulting in huge economic losses of nearly ten billion US dollars. Due to the continuous expansion of the strike, the three major Detroit automakers had to compromise with UAW, and Ford Motor, Stellantis Group and General Motors successively reached a settlement with UAW. It is understood that the interim agreements currently reached by the three car companies include a general wage increase of 25% within four years, and after taking into account the increased cost of living, the maximum hourly wage for production workers will be raised to about $42. The three Detroit giants have reached a settlement with UAW, but will also significantly increase operating costs. In the case of GM, for example, the new contract will cost GM $7 billion over 4. 5 years.

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At the same time, UAW is not satisfied with the status quo and began to recruit employees outside the Detroit Big three, including Toyota, Honda, Tesla and so on. Shawn Fain, chairman of UAW, stressed that the success of the contract with the Big three proves that the way the unions are now organized is effective, and by 2028, the negotiations will not only be with the Big three, but the next step will be to try to organize workers from other automakers, such as Toyota, Tesla and Volkswagen, because none of these companies have unionized their factories in the United States. In view of this, Toyota North America took the initiative to raise wages for its employees in the hope that they could avoid launching a similar strike.

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Compared with Ford, Stellantis and General Motors, workers from non-American companies, including Toyota, Honda and Volkswagen, did not join the guild, making their costs much lower than those of Detroit automakers. However, increasing income inequality and rising inflation in the United States have made life more difficult for Chinese people, forcing non-American auto companies to re-examine workers' wages. To ensure that similar actions do not occur. Toyota, for example, usually evaluates employees' wages twice a year in the spring and autumn to determine if they need a raise. Toyota just raised the hourly wage of the same group of workers by 25 cents an hour in September.

As for Tesla, the largest US electric carmaker with tens of thousands of non-union employees in the US, UAW tried and failed to unionize Tesla workers. It is understood that before the strike, the labor costs of the three major car companies were $66 per hour, which will reach $90 per hour after the new contract, while those for Tesla employees are between $45 and $55.

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By comparison, it seems that Tesla may also face trouble. After the income of Tesla's German factory workers was lower than the industry average, Tesla decided to raise wages for German workers. More than 120 Tesla employees in Sweden have also demanded higher wages, insurance and pension benefits, threatening to go on strike. Tesla's workers in California are planning to form a union, and UAW has promised to provide all necessary resources for collective bargaining at the plant, according to people familiar with the matter.

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