- The UAW union secured historic raises for its 140,000 members after a six-week strike.
- The union now wants to target non-uninonized companies like Tesla.
- Companies including Toyota and Honda are now rolling out raises of their own.
Roughly 140,000 unionized auto workers will soon ratify new contracts with the Detroit 3 automakers that, among other wins, solidify pay and benefits increases of up to 33%, topping out at roughly $42 per hour.
The deals, achieved after a six-week strike that ended in late October, appear to already be having repercussions outside of Ford, and General Motors. Some non-unionized automakers are now boosting wages for their own workers.
Hyundai, a tour-de-force in cool new electric vehicles, on Monday said it would raise wages by 25% for about 4,000 workers at its Alabama and Georgia by 2028, with the first bumps coming in January. The company said the raises would help it remain competitive and recruit and retain top talent.
Hyundai isn’t the first to react to the new UAW contracts. Toyota said earlier in November that it would give workers at its Kentucky factory a 9% raise on January 1, with those at the top of the scale hitting $34.80 an hour, Reuters reported.
And Honda, too, said it would increase wages 11% beginning in January. Both Toyota and Honda also accelerated the time it takes for a starting employee to reach the top pay rate, which would match or come close to promises in the new UAW contracts.
The ripple effects aren’t coincidences.
Harry Katz, a professor of collective bargaining at Cornell University, said it’s likely the UAW settlement contributed to the raises at the nonunion factories.
“There’s also a strong labor market, the companies are doing very well,” Katz said. “They’ve always wanted to stay nonunion, and they try to stay close to the Detroit top-tier wages.”
The UAW, for its part, has openly said it hopes to unionize more factories and automakers — especially Tesla, where pay is, by some measures, significantly less. However, prior unionization drives have failed at Tesla and CEO Elon Musk has been openly hostile about the possibility of one. That’s why some experts say smaller, foreign companies may be easier targets.
“When we return to the bargaining table in 2028, it won’t just be with the Big Three,” President Shawn Fain said this month, “but with the Big Five or Big Six.”
While non-unionized companies appear to be trying to stave off such organizing drives with better pay, the tactic may actually hand the UAW an advantage, Art Wheaton, a labor expert at Cornell University, told Insider.
“Responding with wage increases this quickly only helps the UAW’s cause,” Wheaton said. “They can point to 9% raises at Toyota and say ‘look, we’re already moving the needle, we can keep helping you.'”