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Bow to the union! A number of car companies have announced that they will raise wages for American workers

2024-06-17 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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Atsushi Osaki, chief executive of Japanese carmaker Subaru, said Subaru would raise wages and benefits for US factory workers as a result of a new labor agreement between the auto union and the Detroit giants. Osaki said at the 2023 Los Angeles auto show that the pay increase for workers at the Lafitte assembly plant in Indiana has not yet been determined, but will be in line with the industry level after the new labor agreement between the United Auto Workers (UAW) and GM, Ford and Chrysler parent company Stellantis. He said the increase would include improvements in benefits such as health care, not just salary increases.


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.


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.

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.

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Since the UAW deal, a number of other non-union carmakers have offered to raise wages for US factory workers, including Japanese carmakers Toyota and Honda and South Korean carmaker Hyundai.

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.


Honda said on November 10th that it would raise wages for production workers at its u. S. plants by 11% from January and reduce the time it takes for workers to reach the maximum wage scale from six to three years, in line with key concessions won by UAW in negotiations with the big three.

On November 14th Hyundai said that a new round of pay increases in January would increase the wages of 4000 hourly workers at its Alabama plant by 14 per cent from the past 12 months and would raise the wages of non-unionized workers at its Alabama plant by 25 per cent by 2028. In addition, Hyundai plans to raise wages for workers at its electric car plant in Georgia, which will start production in 2025.

During a visit to Illinois last week, US President Joe Biden expressed support for UAW's efforts to unionize Tesla and Toyota, adding that all US auto workers deserve a deal similar to that recently reached between UAW and the Detroit Big three.

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