The Other Problem Facing the United Auto Workers Union

By: Anneken Tappe · September 21, 2023 · Reading Time: 2 minutes

Southern Discomfort

The United Auto Workers union, or UAW, is in the midst of an historic strike against the Big Three U.S. automakers: Ford (F), General Motors (GM), and Jeep-parent Stellantis (STLA). But contentious contract negotiations aren’t the union’s only concerns.

Over the past few decades, more and more automakers have been moving toward the American South, setting up shop in a region known for lower wages and higher tax incentives — as well as its historical aversion to labor unions.

Decades of Drift

The auto industry’s roadtrip south started in the 1970s and 1980s, led by foreign automakers like Nissan (NSANY), BMW (BMWYY), and Mercedes-Benz (DDAIF). Today, as these companies increasingly shift toward electric vehicles, that migration has accelerated.

Of the billions automakers have pledged to invest in EVs, the Center for Automotive Research estimates half will wind up spent in the South. Across Georgia, Tennessee, Kentucky, and the Carolinas, announced EV investments total more than $80 billion and 95,000 jobs since 2015.

Electric Tensions

While traditional assembly-line jobs in Michigan continued to be union-driven, automakers flocking to the South have been hiring non-union labor, distorting the union representation across the country. And the new nonunion jobs at southern battery factories pay notably less than veteran UAW wages.

The UAW’s ongoing strike aims to address and resolve specific contractual issues. But the union must also navigate broader industry changes.

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