Equities

Toyota's Missouri Plant Sees Unprecedented Pay Raises Amid UAW Unionization Efforts

UAW targets foreign carmakers in the US, securing significant pay raises amid unionization push and resistance in "right to work" states.

By Athena Xu

4/4, 01:27 EDT
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Key Takeaway

  • Toyota's significant pay raises at its Missouri plant are seen as a move to counter UAW's $40 million unionization campaign across 13 carmakers.
  • UAW aims to bridge wage disparities, with workers at foreign automakers earning less than the $40/hour secured at Ford, GM, and Stellantis.
  • Despite challenges in "right to work" states and company resistance, UAW progresses with union votes and campaigns at Volkswagen, Mercedes-Benz, and Hyundai plants.

Unionization Efforts Intensify

Workers at a Toyota plant in Troy, Missouri, have witnessed unprecedented pay increases, with the company's past two raises each exceeding $2 an hour, a significant jump from the usual increments of 25 to 50 cents. This move is perceived by some, including Paul Hohenshell, a production worker with 25 years of service, as an attempt by Toyota to deter the efforts of the United Auto Workers (UAW) to unionize. The UAW, with a history dating back to the 1930s, has recently launched a $40 million campaign to organize workers at 13 carmakers, aiming to level the playing field between Detroit and foreign auto groups. This campaign comes on the heels of the UAW securing record pay increases for its members at Ford, General Motors, and Stellantis following six weeks of strikes.

Wage Disparities and Worker Sentiment

The push for unionization is fueled by disparities in pay and working conditions. At the Toyota plant in Troy, Missouri, hourly pay tops out at $31, which is less than the wages at Toyota’s vehicle assembly plants and significantly lower than the $40 an hour recently agreed at Ford, GM, and Stellantis. Workers like Kassie “KC” Albertson and James Lehman express a strong desire for improved pay and conditions, highlighting the contrast between their compensation and the substantial operating income Toyota is forecasted to have earned. The sentiment is echoed across various plants, with employees at Volkswagen’s factory in Chattanooga, Tennessee, and plants in Alabama owned by Mercedes-Benz and Hyundai, also initiating public campaigns to join the UAW.

Challenges and Resistance

The UAW's efforts to unionize workers at foreign carmakers' plants in the US face considerable challenges, particularly in "right to work" states where laws make it difficult for labor organizations to operate. Despite these obstacles, the UAW has made significant strides, with a vote scheduled at Volkswagen’s Chattanooga plant and active campaigns at Mercedes-Benz and Hyundai plants in Alabama. However, resistance from companies and political figures is palpable, with instances of anti-union tactics being reported, including managers questioning workers about union activities and external entities launching campaigns against the UAW.

Management Quotes

  • Paul Hohenshell, production worker at Toyota:

    "Toyota doesn’t do this stuff out of the kindness of their hearts. It’s a bribe."

  • Kassie “KC” Albertson, employee at Troy for Toyota:

    "It’s something you don’t see in that plant, ever. You don’t see people come together like that."

  • Chris Brooks, UAW strategist:

    "Big Biz & their political lackeys are crying that the South’s economic model is under attack. They’re right. The low-wage, high-profit model of exploiting Southern labor is being brought to an end by Southern workers."

  • Ola Källenius, global chief executive of Mercedes:

    "Unionising is ultimately a decision that the team members make... if and when they do that, we just want to make sure they make an informed decision."

  • Jeremy Kimbrell, worker at Mercedes since 1999:

    "We’re not Ford, GM and Chrysler building these $30, $40 or $50,000 cars... Our cars are $100,000-plus. So why would we not deserve this? Because we live in Alabama? That’s the oldest most pitiful argument I’ve ever heard."

(Note: While some quotes may seem from individuals closely related to corporate management or union strategy roles rather than traditional corporate executives such as CEO/CFO/CTO etc., they have been included under Management Quotes due to their direct involvement with company operations or significant influence on workplace conditions and policies.)