The United Auto Workers reached a last-minute deal with Daimler Truck in North Carolina on Friday that gave workers a 25 percent raise and avoided a strike which would have started on Saturday.
The union had said it was prepared to walk out if it could not agree on a new contract covering 7,300 Daimler employees. The previous contract expired on Friday. The German company has four factories in North Carolina, where it builds Freightliner and Western Star trucks, as well as Thomas Built buses. The union also represents workers at parts distribution centers in Atlanta and Memphis.
The deal, which includes profit sharing, automatic cost-of-living increases and wage equalization among North Carolina factory workers, marks a victory for the UAW as it attempts to expand its power in Southern states where unions have long been weak.
“As this deadline approached, the company suddenly became prepared to talk,” Shawn Fain of the UAW said Friday evening in announcing the agreement, which will give workers raises of at least 16 percent in the first year after contract ratification.
A walkout would have had national political repercussions. North Carolina is a political battleground state with a Democratic governor, but President Biden narrowly lost the state in 2020. Mr. Biden had indicated he might move aggressively to support Daimler workers, which could put him at odds with the state’s more business-friendly Democrats just months before Election Day.
The UAW made inroads in the South. He won a significant victory this month when workers at the Volkswagen plant in Chattanooga, Tennessee, voted to be represented by the union. Workers at a Mercedes-Benz plant in Alabama will vote in mid-May on whether to unionize.
Workers at Daimler Truck, which split from Mercedes-Benz in 2021, have been represented by the UAW for several decades. The union took a more assertive stance after securing the biggest pay raises in decades for workers at Ford Motor, General Motors and Stellantis, owner of Jeep, Chrysler and Ram following strikes at all three companies last year .
Gains for workers at Daimler could provide momentum to the UAW’s push to organize U.S. auto factories, including those of companies like Toyota and Tesla.
North Carolina workers said they struggled to make ends meet while Daimler racked up huge profits. The Stuttgart-based company reported net profit last year of 4 billion euros, or $4.25 billion, an increase of 44 percent from the previous year. Sales in the United States, Canada and Mexico generated more than half of the profit.
The union points out that Thomas Built, whose yellow school buses are commonplace, has benefited from millions of dollars in federal subsidies for electric buses. Thomas Built workers earned less than their counterparts at other plants, but the deal will give them wage increases to make up the shortfall.
“Workers who make trucks and workers who make buses will receive equal pay for equal work,” Fain said.
The agreement also includes provisions intended to preserve jobs in North Carolina. Workers were seeking greater job security after the company moved some of its production to Mexico.
