Mercedes autoworkers vote against union membership - updated

Updated 15:31pm: Autoworkers at Mercedes' Alabama facility have voted AGAINST union membership with 56% voting against and 44% voting for.

The 5,000 autoworkers at Mercedes’ (MBGAF, MBGYY) Alabama facility have voted against joining the United Autoworkers Union with 56% voting against and 44% voting in favor. A “yes” vote would have given the UAW further inroads in unionizing foreign-owned automakers, while a “no” will now make it increasingly difficult to galvanize workers at Toyota's (TM) Troy, Missouri factory, and Hyundai (OTCPK:HYMTF) workers in Montgomery, Alabama. Unlike the historic vote to unionize at Volkswagen’s (OTCPK:VWAGY) Chattanooga, Tenn. plant, the union had a much bigger challenge at Mercedes (MBGAF, MBGYY).

Automakers like Mercedes (MBGAF, MBGYY), Volkswagen (OTCPK:VWAGY), and Hyundai (OTCPK:HYMTF) have centralized their U.S. manufacturing in the south to capitalize on cheap labor in Right-to-Work states like Georgia, Alabama, and North Carolina. And until recently, the likelihood of the UAW gaining a foothold in the South seemed unlikely even after winning concessions from Detroit’s Big 3 this fall. Although the union secured higher wages and more generous retirement benefits, Ford (F), General Motors (GM), and Stellantis (STLA) subsequently cut jobs to compensate for higher labor costs and slowing demand for EVs.

Declining manufacturing jobs and a tight labor market is also behind declining union membership. This has contributed to union wages growing slower than their non-union colleagues. According to Reuters, non-union weekly wages increased 22.2% since 2019 while union pay is only 15.3% higher. While there are ancillary factors that influence this data such as “wage spillover” in which non-union employees enjoy higher pay granted to union workers, the advantages of joining a union have dimmed over the years.

To keep the union out, Mercedes (MBGAF, MBGYY) waged a determined campaign, eliminating the two-tier pay system that paid new hires significantly less, and pledging to engage employees in wage negotiations. According to a letter viewed by The Huffington Post, CEO of Mercedes-Benz US International Federico Kochlowski wrote “Although I respect everyone’s right to take a position on this matter, I prefer that we work on our future together without anyone else between us.”