The United Automobile Workers on Friday reached an 11th-hour deal with Daimler Truck in North Carolina that gave workers 25 percent raises and averted a strike that would have started on Saturday.
The union had said it was ready 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 plants in North Carolina, where it builds 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 and wage equalization among workers at 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.
“As that deadline got closer, the company suddenly got ready to talk,” Shawn Fain of the UAW said late Friday as he announced the deal, which will give workers raises of at least 16 percent in the first year after they ratify the contract.
A strike would have had national political consequences. North Carolina is a political battleground state that has a Democratic governor, but President Biden narrowly lost the state in 2020. Mr. Biden had indicated he might move aggressively to support the Daimler workers, potentially putting him at odds with the state’s more pro-business Democrats just months before Election Day.
The UAW has made inroads in the South. It scored a significant victory this month when workers at Volkswagen’s plant in Chattanooga, Tenn., voted to be represented by the union. Workers at a Mercedes-Benz plant in Alabama will vote on whether to organize in mid-May.
Workers at Daimler Truck, which left Mercedes-Benz in 2021, have been represented by the UAW for decades. The union has taken a more assertive stance after winning the biggest wage increases in decades for workers at Ford Motor, General Motors and Stellantis, the owner of Jeep, Chrysler and Ram, following strikes at the three companies last year.
The gain for the workers at Daimler could add momentum to the UAW’s push to organize American auto plants, including at companies like Toyota and Tesla.
Workers in North Carolina said they have struggled to make ends meet while Daimler raked in big profits. The Stuttgart-based company last year reported a net profit of 4 billion euros, or $4.25 billion, up 44 percent from a year earlier. 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 a common sight, has benefited from millions of dollars in federal grants for electric buses. Thomas Built workers have been making less than colleagues at other factories, but the deal will give them raises to cover the shortfall.
“Workers who make trucks and workers who make buses will get equal pay for equal work,” Mr. Fain said.
The agreement also includes provisions designed to preserve jobs in North Carolina. The workers had sought more job security after the company moved some production to Mexico.
