What does UAW’s failed Mercedes-Benz union vote mean for Alabama? What comes next? (2024)

With the possibility of a unionized workplace at Alabama’s first auto plant seemingly in the rearview mirror for now, the state’s economic strategy for recruiting major employers is expected to remain status quo.

But that comes with a cost dubbed the “Alabama discount.”

That’s what union advocates and some workers use to describe the state’s practice of handing over millions of dollars in economic incentives to big companies like Mercedes-Benz without, they say, ensuring better working conditions and pay for the people who make the cars.

Read more about the Alabama Mercedes union battle

Though the United Auto Workers can still challenge the election results with the National Labor Relations Board, the vote tally on Friday showed about 56% of workers at the state’s two Mercedes plants in Vance and Woodstock opted against unionizing.

Workers voted 2,045 to 2,642 against UAW representation.

Nearly 5,100 production and maintenance workers at the automotive plant in Vance and the electric battery plant in Woodstock were eligible to vote.

‘The most difficult fight so far’

The failure was unexpected by experts as well as union advocates, as 70% of workers in Alabama signed union authorization cards as of April.

It came amid UAW’s $40 million push for unionization in the South and on the heels of a landslide victory last month at Volkswagen’s factory in Chattanooga.

The loss in Alabama is emblematic of UAW’s uphill battle, experts say, in “right-to-work” states that have historically had strong resistance to unionization.

“The UAW still has the winds in its sails coming off its wins,” said Abe Walker, an assistant professor of Sociology who researches the labor movement at Fayetteville State University in North Carolina.

“While that momentum won’t last forever, it also won’t reverse course because the union lost what everyone knew would be its most difficult fight so far.”

UAW could still challenge the election results, especially since the outcome came down to a small number of votes. Either party will have five days to file any objections with the National Labor Relations Board’s regional director in the southeast.

Here’s what the loss means for Alabama’s economy, other automakers, and workers.

What does it mean for workers?

Pro-union workers at these two Mercedes plants said they hoped organizing could help them achieve better pay and retirement plans, as well as improvements to healthcare and working conditions. But some anti-union workers said they didn’t trust union leadership to deliver on their promises.

With the failure, workers could miss out on opportunities for increased pay and better benefits that unions typically negotiate, said Wafa Orman, associate dean of the College of Business at the University of Alabama at Huntsville.

On the other hand, Orman said, some workplaces hire fewer people if unions negotiate for higher wages. That means some employers have less of a reason to cut back on manufacturing jobs in nonunionized workplaces, Orman added.

While this failure could slow down further attempts to unionize, she said doesn’t expect this to completely halt other efforts to unionize across the state amid a labor organizing push nationwide.

Faiz Shakir is the president of More Perfect Union Solidarity, a media organization that’s supported UAW’s campaign in Alabama. He said he expects the labor organizing momentum among Alabama workers to spread to other industries, such as meatpacking.

“Amazon workers were courageous to try this. Vance workers were courageous to try this,” Shakir said. “Alabama’s got no shortage of the types of workers who are over-indexed with the courage to take on powerful actors.”

While Haeden Wright, a senior organizer for Jobs to Move America who lives near Vance, expected a victory for UAW, she doesn’t see the results as a total failure.

“It doesn’t mean that they haven’t built power in their workplace, because they’ve still come together,” she said. “They’ve already seen Mercedes making concessions just by having the threat of having a contract there.”

Earlier this year, Mercedes increased Alabama auto workers’ pay by 6% and ended its two-tier pay system. The company’s U.S. CEO Michael Göbel also resigned after leading a mandatory anti-union meeting.

What does it mean for automakers in Alabama?

Mercedes-Benz was the first to open an automotive assembly plant in Alabama, back in 1993. Since then, others have joined in opening plants across the state: Honda in Lincoln, Hyundai in Montgomery, and Toyota in Huntsville.

Alabama now leads the nation in passenger vehicle exports, shipping out $11 billion worth of cars last year.

Workers at the Hyundai plant launched their own campaign to join the UAW in February, and experts say that the Mercedes-Benz result doesn’t necessarily doom pushes elsewhere in Alabama – largely because of timing.

“The UAW went on strike at a time when automakers profits were increasing,” Orman said. “They saw an opportunity and they went for it. If they tried to seek these tactics when profits were falling, it would have been disastrous.”

Stephen Silvia, politics and economics professor at American University and author of “The UAW’s Southern Gamble,” said that the Alabama loss impacts UAW’s ability to tell a compelling story as part of its southern campaign. It’s a bump in the road after successfully negotiating contracts for unionized workers at Detroit’s Big Three car companies, and the recognition election with Volkswagen in Tennessee.

But he added that he thinks successful labor organizing ultimately comes down to the local experience.

“If UAW loses at Mercedes, the extent to which that would hurt, for example, an organizing drive in Montgomery at Hyundai, could hit the margin,” he said. But he said that he doubts those effects will be lasting. “The most important thing is what your coworkers are thinking and saying, what your friends, what your relatives are saying, in your planet, in your community.”

What does this mean for Alabama’s economy?

Alabama Gov. Kay Ivey and other political leaders across the state rejoiced over the news of UAW’s failed election on Friday afternoon, calling it a win for the auto industry and Alabama’s economy.

“I am grateful to these companies who provide good pay, benefits and opportunities to many men and women across our state,” Ivey said in a statement. “Automotive manufacturing is one of Alabama’s crown jewel industries and number one in the country, and we are committed to keeping it that way.”

Keeping Alabama automotive plants nonunionized means that, in state leaders’ view, they can maintain the status quo as the top auto exporter and a major hub for manufacturing, Orman and Silvia said. But that comes at the expense of blue-collar workers, who lose out on pay and job security compared to unionized workers.

“Alabama politicians have tried to attract investment, and the way they’ve attracted investment is to say we have low taxes, low regulation, low land prices, low cost of living, and we have low wages,” Silvia said. “You will have a lot of discretion in how you run a workplace because we have low unionization rate.”

A unionized workforce could also strengthen company loyalty and produce healthier workers, with improved healthcare access, Wright said.

But Silvia said he believes that union representation wouldn’t eliminate all the advantages to producing cars in southern states like Alabama. Yet, earlier this week Gov. Ivey signed a law that could incentivize current employers to avoid cooperating with unions in the future.

The legislation allows Alabama to withhold economic incentives from companies that don’t hold secret ballot elections or voluntarily recognize unions – a shorter, more direct process than the election route that UAW took. Any companies that violate these provisions would have to repay incentives starting in 2025.

“When you have an election, that opens up the opportunity for anti-union consultants,” Silvia said. “To the extent that they do affect outcome, it would mean that unionization would be a little less likely, on average.”