With the United Auto Workers having won considerable wage rises from the Detroit Three, and threatening to revitalise efforts to ‘organise’ non union southern automaking plants, Hyundai has apparently pre-empted that by announcing a new wage structure for workers at Hyundai Motor Manufacturing Alabama (HMMA) and Hyundai Motor Group Metaplant America (HMGMA) in Georgia.
Earlier, Toyota raised US factory pay 9% to 10% starting in January while Honda said it would increase wages 11% during the same period, according to cbsnews.com.
That report noted Toyota and Honda had also accelerated the time it takes for a starting employee to reach the top pay rate, also matching or coming close to the time period in the new UAW contracts.
Harry Katz, a professor of collective bargaining at Cornell University, told cbsnews.com it’s likely the UAW settlement contributed to the raises at the non union factories.
“There’s also a strong labour market, the companies are doing very well,” Katz said.
“They’ve always wanted to stay non union, and they try to stay close to the Detroit top-tier wages.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Katz estimated Hyundai now pays around $25 per hour and said the non union plants’ retirement, health care and other benefits are typically not as good as what UAW workers get.
Katz told CBS News the UAW’s new contract probably won’t help the union get workers at the non union plants to join. The plants, he said, are in areas of the country that are often suspicious of unions.
“Detroit’s wage has been higher than the non union before,” he said. “There’s always been a difference and they just haven’t been able to organise them. It doesn’t hurt them to have won such a large deal, but I don’t think it’s going to make that big of a difference.”
HMMA has been producing vehicles in Montgomery, Alabama since 2005. HMGMA, the EV dedicated plant in Bryan County, Georgia, is scheduled to begin production in early 2025.
Hyundai will begin a wage strategy in January 2024 that will result in US production worker hourly wages increasing 25% by 2028. The tentative UAW deal – now undergoing ratification – was a roughly 25% raise over four years, as well as significant improvements on pensions and the right to protest the closure of plants.
Since reaching the agreements, UAW president Shawn Fain has touted them as a major victory for the union and the broader labour movement.
Hyundai said it was increasing its wage structure “to remain competitive and to recruit and retain top talent”.
Alabama workers had achieved their production targets this year, including successful preparations to begin production of the redesigned Santa Fe in January 2024 and Genesis Electrified GV70, earlier this year.
At the beginning of 2024, HMMA will have increased pay by 14% over the last year, including a raise received earlier in 2023. Wage progression to the top rate is already at 30 months (2.5 years) and HMMA provides 25 vacation days to workers with 15 years of service.
“We have the best team members in the industry, and we are compensating them accordingly,” said José Muñoz, president and global COO, Hyundai Motor Company and president and CEO, Hyundai and Genesis Motor North America.
“Hyundai continuously strives to maintain competitive wage and benefits commensurate to industry peers.”
Hyundai Motor Group is investing US$12.6bn to build HMGMA and two battery joint ventures in Georgia. The investment will create 12,000 direct jobs and a claimed tens of thousands of indirect jobs.