republican debate

The difference between unionized and non-unionized automakers

  • The presence of the UAW gives workers extra leverage 
  • But some non-union auto companies offer similar pay to deter unions
  • The UAW may have the least leverage over battery plants

TOLEDO, OHIO – SEPTEMBER 18: A close-up view of the signs used by the United Auto Workers members to picket outside the Jeep Plant on September 18, 2023 in Toledo, Ohio. The U.A.W. walked out of three locations on Thursday night at midnight, marking the first time they’ve been simultaneously on strike at Ford, General Motors, and Stellantis the big three automakers. (Photo by Sarah Rice/Getty Images)

(NewsNation) — The United Auto Workers (UAW) strike against the “Big Three” American automakers — Stellantis, Ford and GM — is calling attention to autoworker pay and benefits nationwide.

The UAW has long represented workers, largely in the Midwest, who these legacy automakers employ.

But it’s had less success winning representation in the American South, where largely non-unionized international automakers increasingly employ workers to produce cars for companies such as Honda, Toyota, Hyundai, Kia, Mercedes and others.

Arthur Wheaton, the director of Labor Studies at the School of Industrial and Labor Relations at Cornell University, noted that many of those non-unionized companies pay comparable wages compared to their UAW counterparts.

“Some of the companies like Toyota and Honda choose to use a strategy where we’re going to pay close to what they pay to the Big Three so that you have no incentive to organize and to form a union here. So the union wage serves as a deterrent,” he said.

A September 2022 report published by Autos Drive America — an industry-backed organization that represents foreign automakers — noted the average starting wage for directly hired production workers at a series of plants they surveyed was $19.02 while the “top-out” wage (the wage you can graduate up to) was $28.01.

That’s similar to the $33 an hour that top-tier workers at the Big Three make (lower tier earn around $17), as reported by CBS News.

But beyond the issue of pay, one of the longstanding benefits of being in the UAW has been its traditional pension plans.

The workers in the top tier, who had been employed at the companies before 2007, still have access to those pension plans. Workers who joined the companies after that, though, only have access to a 401(k), making their benefits more similar to autoworkers elsewhere in the country.

One of UAW’s demands is to bring back those pension plans for all workers. This would make a job — even for a newly employed worker who is not in the top tier — at the Big Three more financially secure than the the competition.

“I don’t know of any of the other non-union plants giving a defined benefit pension,” Wheaton said.

But as the UAW pressures the Big Three for pay increases, a return to pensions for more workers and a shorter workweek, it’s also dealing with another obstacle: the rise of electric cars.

Most of those cars sold in the U.S. are made by a single company that is known to pay less than its competitors

“Companies like Tesla and others don’t really care what they pay for the Big Three, they’re just going to pay what they pay and they tend to be significantly lower than what the legacy workers make,” Wheaton said.

Combined pay plus benefits at Big Three automakers average out to around $66 an hour, while at Tesla, it comes out to $45 an hour, according to the Wall Street Journal.

But it’s not just pressure from Tesla that’s giving the UAW headaches. The union scored a rare win at a battery plant in Ohio recently, which will result in a 25% wage increase, CNN reported. Workers at the plant previously were earning around $16 an hour.

But because of the nature of these plants, they can’t be added to the strike.

“The biggest problem for the battery plants is for General Motors, Ford, and Stellantis; they are all joint ventures,” Wheaton noted.

Most of these battery plants are operated by both an American company and a foreign firm from China, South Korea or Japan. It would be illegal for the UAW to engage in strikes against these plants.


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