Supply Chain Matters highlights development indicating that The United Auto Workers (UAW) labor union has filed for a representation election involving auto workers at the Mercedes production facility in Alabama.

 

Background

Prediction Four within the Ferrari Consulting and Research Group’s 2024 Predictions in Global Supply Chains represented our belief that the increased labor activism that occurred in 2023 will continue this year, but with different nuances.

Worker grievances dating back to the Covid pandemic years came to the forefront in 2023. They were expressed as longer mandatory hours of work, impacts of rising inflation on worker’s household budgets, prior wage concessions in tough economic times and perceptions of corporate greed in salaries and bonuses of business CEO’s.

Labor activism in the form of labor contract negotiations will continue in 2024, and include spillover from actions that occurred in 2023.

Automotive Industry Targeting

The UAW announced increased organizing efforts after the labor union’s 2023 labor contract gains with U.S. automakers Ford Motor, General Motors and Stellantis. Of the most concern was the tactic of targeting a company’s vulnerable supply chain points in labor stoppages, which was adroitly practiced by the UAW.

As Supply Chain Matters has noted in prior published commentaries, after the contract settlement involving the UAW and the three targeted U.S. automakers, several nonunion producers to include Honda, Hyundai, Subaru, Toyota and Tesla announced new 2024 pay raises for production workers.

A majority of workers at Volkswagen’s U.S. based Chattanooga, Tennessee plant have signed cards to join the UAW, less than sixty days after the workers announced their campaign to form a union at the German automaker’s only U.S. assembly plant. That election is scheduled to occur later this month from April 17 to April 19.

The milestone marked the first non-union auto plant to publicly announce majority support. The UAW further announced that over 30 percent of workers at Hyundai’s sole U.S. plant in Montgomery, Alabama, have signed union cards.

 

Mercedes Alabama Facility

The latest development involves the Mercedes production facility located in Vance, Alabama. This facility reportedly employs upwards of 6,000 workers and primarily produces SUV’s.

Last week, reports indicated that 70 percent of the facility’s workers had signed on for labor union representation and the UAW is petitioning the National Labor Relations Board (NLRB) to schedule and oversee a formal election.

According to a published report by Reuters, the labor union indicated that a “supermajority” of 5,200 eligible Mercedes workers at the plant and a nearby plant in Woodstock, Alabama had signed cards to join the union. The labor union is reportedly seeking a formal organizing vote to occur in early May.

Mercedes Benz US International issued a statement indicating that the company fully respects team member choices whether to unionize and the company looks forward to participation in this process including workers having access to the information necessary to make an informed choice.

According to reports from local media, workers are citing low wages, unpredictable work schedules and an overreliance on temporary workers as grievances.

 

Difficult Battle Expected

The recent history of labor union organizing efforts in the non-unionized U.S. Southern states with right-to-work statues has proven difficult for formal unionization efforts.

Readers might recall efforts among workers at the Amazon Bessemer Alabama customer fulfillment facility in 2022 which garnered national headlines with political overtones. The organizing effort was narrowly defeated by a narrow margin in a highly publicized election.

Alabama’s Governor Kay Ivey has publicly called the Mercedes and Hyundai organizing efforts as a “threat from Detroit” which prompted a sharp rebuke from UAW President Shawn Fein.

Reportedly, the UAW has already filed complaints of unfair labor practices against Mercedes with the NLRB alleging that labor union supporters have been illegally disciplined of terminated because of their labor union advocacy.

Such added labor activism comes in the backdrop of a U.S. Presidential election cycle leading up to November.

Such activism involves other industries as well.  In the midst of the ongoing production quality crisis involving commercial aircraft producer Boeing, labor contract renewal talks among union workers at the Seattle production complex are anticipated to get underway. There is already speculation that labor union leaders will weigh in on job losses and Boeing’s corporate culture for favoring shareholder returns over that of production worker pay and ongoing work practices.

Stay tuned.

 

Bob Ferrari

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