The United Automobile Workers on Friday reached an 11th-hour deal with Daimler Trucks in North Carolina that gave workers a 25 percent pay raise over the next four years and averted a strike that was set to begin 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 makes Freightliner and Western Star trucks and 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 workers in North Carolina factories, marks a victory for the UAW as it tries to expand its power in southern states where unions have long been weak.
“With that deadline approaching, the company is suddenly ready to talk,” UAW President Shawn Fine said late Friday as he announced the deal, which will give workers at least a 16 percent raise in the first year of the agreement. .
Daimler Trucks said in a statement that it hoped UAW members would ratify the tentative agreements “for the mutual benefit of all parties.”
The walkout would have had national political consequences. North Carolina is a political battleground state with a Democratic governor, but President Biden narrowly lost the state in 2020. Mr. Biden indicated that Daimler may step in aggressively to support workers. -Business Democrats a few months before Election Day.
The UAW is gaining ground in the South. Chattanooga, Tenn. this month. It won a significant victory when Volkswagen factory workers in , , voted for union representation. Workers at a Mercedes-Benz plant in Alabama will vote on whether to unionize in mid-May.
Workers at Daimler Trucks, which split from Mercedes-Benz in 2021, have been represented by the UAW for decades. The union has taken an even firmer stance after winning the biggest pay raises in decades for workers at Ford Motor, General Motors and Stellandis, the owner of Jeep, Chrysler and Ram, after strikes at the three companies last year.
Gains by workers at Daimler could add momentum to the UAW's push to organize U.S. auto factories, including at companies like Toyota and Tesla.
Workers in North Carolina say they struggle to make ends meet while Daimler makes huge profits. The Stuttgart-based company reported a net profit of 4 billion euros, or $4.25 billion, last year, up 44 percent from the previous year. Sales in the United States, Canada and Mexico accounted for half of the profit.
The union points out that Thomas Built, whose yellow school buses are a common sight, has benefited from millions of dollars in federal subsidies for electric buses. Thomas Build workers have been earning less than at other factories, but the deal will give them a raise to make up for the shortfall.
“The workers who make trucks and the workers who make buses will get equal pay for equal work,” said Mr. Fine said.
The agreement also includes provisions aimed at protecting jobs in North Carolina. Workers sought more job security after the company moved some production to Mexico.
