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Analysis-UAW deal with Daimler Truck boosts energy ahead of Mercedes vote in Alabama

Published 04/29/2024, 01:34 PM
Updated 04/29/2024, 01:40 PM
© Reuters. FILE PHOTO: A sign showing the name of German truck maker Daimler is pictured at the IAA truck show in Hanover, September 22,  2016.  REUTERS/Fabian Bimmer/File Photo
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By Nora Eckert

DETROIT (Reuters) - The United Auto Workers' new labor contract with truck and bus maker Daimler Truck is likely to energize workers ahead of the union's next target in the U.S. South - organizing a Mercedes-Benz (OTC:MBGAF) auto assembly plant in Alabama.

The tentative Daimler Truck contract, agreed to late on Friday, includes a 25% general wage increase over four years and, for the first time, profit-sharing and cost-of-living adjustments for workers at the maker of Freightliner and Western Star trucks and Thomas Built buses. 

UAW President Shawn Fain said at a rally in North Carolina on Saturday that the Daimler Truck deal included no concessions and paved the way for other hourly workers.

"Time's up for companies that want workers to feel the pain while they take all the profit," he said. "The clock has run out on corporate greed. Today belongs to the working class."

More importantly, it shows the 5,200 eligible workers at Mercedes-Benz's plant in the Tuscaloosa area what is possible when they vote on whether to join the union, union officials and labor professors said.

“Success is contagious, and it builds momentum,” Marick Masters, labor professor at Wayne State University in Detroit, said of the agreement and its impact on the upcoming vote at Mercedes. 

Union officials at the North Carolina rally pointed to Mercedes as the next organizing target, as well as other automakers with plants in the South, including Nissan (OTC:NSANY) and BMW (ETR:BMWG).

"We set an example for the entire South. I hope Mercedes in Tuscaloosa (Alabama) was paying attention to what we're doing," said Corey Hill, president of UAW Local 3520, which represents Daimler Truck workers in Cleveland, North Carolina.

Workers at a Mercedes factory in Vance, Alabama, and a nearby battery plant in Woodstock will vote on joining the union in an election that is scheduled to be finalized on May 17. Mercedes said in a statement it respects its workers' rights to choose whether to unionize.

Daimler and Mercedes have shared history: Daimler AG (ETR:MBGn) spun off Daimler Truck in early 2022, and then became Mercedes-Benz Group. Mercedes retains a 30.01% stake in Daimler Truck, a Mercedes spokesperson said.

The terms of the Daimler Truck deal largely match those reached last fall with the Detroit Three automakers: General Motors (NYSE:GM), Ford (NYSE:F) and Chrysler parent Stellantis (NYSE:STLA). 

Workers at a Volkswagen (ETR:VOWG_p) factory in Tennessee, who earlier this month voted in favor of joining the union with a 73% majority, said the Detroit Three agreements inspired them to join the UAW's ranks. 

"When we say record profits mean record contracts, we mean it," Fain said in a video address on Friday evening after the Daimler Truck deal was announced.

The Mercedes vote is expected to be a tougher battle than at VW, which on April 19 became the first auto plant in the U.S. South to unionize via an election since the 1940s. 

ANOTHER SOUTHERN WIN

The Daimler agreement marks another UAW victory in the historically anti-union South, Masters said, and is likely to catch the attention of Mercedes workers. Daimler is in Mercedes' backyard, with four factories in North Carolina, as well as parts warehouses in Georgia and Tennessee.

"Working people are standing up and saying, 'No more,'" MaryBe McMillan, president of the North Carolina State AFL-CIO, said at the North Carolina rally. "No more; I've seen CEO pay. No more moving companies South to bust unions and pay workers pennies. It is a new day here in the South." 

Had the UAW and Daimler Truck failed to reach a deal, the union said workers would have gone on strike. A walkout could have made some Mercedes workers skittish about joining the union, Cornell University labor professor Art Wheaton said. 

© Reuters. FILE PHOTO: A sign showing the name of German truck maker Daimler is pictured at the IAA truck show in Hanover, September 22,  2016.  REUTERS/Fabian Bimmer/File Photo

“If they were out on strike, and if they were facing a lot more opposition, that makes it tougher,” he said, adding that workers, especially in less union-friendly areas, can be hesitant when faced with the prospect of making little pay on the picket lines. 

   The union has invested $40 million in its campaign to organize factories owned by more than a dozen nonunion automakers in the U.S., including Asian companies like Toyota Motor (NYSE:TM) and major electric-vehicle makers including Tesla (NASDAQ:TSLA).  

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