Car companies with production facilities in the United States are increasing pay for their non-unionized workers following the United Auto Workers (UAW) securing landmark wage hikes and benefits for union workers at Detroit’s Big Three automakers – General Motors (GM), Ford Motor, and Stellantis.
The UAW’s agreements with these automakers, extending through 2028, include a substantial 25% increase in base wages, with an immediate 11% hike, resulting in a cumulative 33% raise in the top wage. The deal also eliminates wage tiers in factories and accelerates the time to reach the top wage from eight to three years.
In response to the UAW deals, several car manufacturers have opted to enhance wages for their non-union workers:
- Tesla (TSLA.O): Plans to raise wages by approximately 10% for select hourly workers at its battery factory in Sparks, Nevada, starting early January. Potential streamlining of worker levels is also under consideration.
- Volkswagen (VOWG_p.DE): Announced an 11% pay raise for non-union production workers at its Chattanooga assembly plant in Tennessee, effective December 2023.
- Nissan Motor (7201.T): Will implement a 10% wage increase for U.S. manufacturing plant workers in January, impacting around 9,000 employees. The company is also eliminating wage tiers for U.S. production workers.
- Hyundai Motor (005380.KS): Plans to increase wages for nonunion production workers at its Alabama factory by 25% by 2028, affecting approximately 4,000 hourly workers.
- Honda Motor (7267.T): Will provide an 11% pay raise for production workers at its U.S. facilities starting in January, along with a reduction in the time required for factory workers to reach the top-wage tier, from six years to three.
These adjustments come in the aftermath of President Joe Biden’s support for the UAW’s efforts to unionize other carmakers, with the union extending its focus to foreign-owned and Tesla auto plants.
