As an 11:59 p.m. eastern time deadline looms for a contract agreement between the UAW and the Detroit 3 automakers, the head of Hyundai’s North American unit is keeping a close watch on the talks.
The South Korea-based automaker operates an assembly plant in Alabama and is building a factory to produce electric vehicles near Savannah, Ga.
“We are obviously paying attention to everything that happens in the industry on a constant basis,” said Jose Munoz, president and chief operating officer, Hyundai Motor Co. and president and CEO, Hyundai Motors North America, in an interview Tuesday.
The company’s Korean workforce is unionized and the UAW would sorely like to bring its U.S.production employees under its banner.
The union has make aggressive demands on General Motors Co., Ford Motor Co. and Stellantis in the current contract negotiations, threatening a strike against one, or all three if Thursday night’s deadline isn’t met.
If the UAW should succeed in winning major pay raises and other concessions, it could give workers at foreign automakers that operate non-union plants in the U.S. a reason to reconsider their resistance to UAW representation.
During a side discussion following a ribbon-cutting of Hyundai’s new safety test and investigation lab near Ypsilanti, Mich., Munoz maintained his company is doing all it can to convince its U.S. plant workers they already are making top dollar.
“We try to offer to our employees the best conditions that we possibly can. In fact, we have recently announced an additional investment of $2 billion in our plants in Savannah, Georgia, actually two weeks ago,” said Munoz. “We could announce that we are offering wages which are about 25% above the average wages in in that state and then we tried to bring the best that we possibly can to our employees in terms of health and holidays and paid holidays and conditions.”
Should a strike against the domestic automakers occur, however, Munoz is confident his company won’t be affected by any disruption in the supply chain, declaring, “if there is one thing we’ve learned over the last two to three years during COVID is to find ways to keep going. I think we were one of the companies who did a better job in terms of getting the sourcing of chips and many other critical components. I think now we are I think stronger than we’ve ever been before basically by localizing more by having alternatives.”
Meanwhile, the contract talks are entering crunch time as Thursday night’s deadline quickly approaches. UAW president Shawn Fain roundly rejected initial offers from each company but there does appear to be some progress being made.
“There was good energy among both teams and great momentum to reach an agreement as we head into the final days before the contract expires Thursday night. “I’m pleased to report that the Stellantis and UAW subcommittees have reached tentative agreements in a number of important areas, including health and safety, which is of critical importance as the well-being of our people is at the core of our corporate values,” wrote Tobin Williams, senior vice president, North American Human Resources at Stellantis in a note to employees on Monday, posted on the company website dedicated to contract talks updates.
But these talks are unlike any in past years. Traditionally, the UAW would choose a so-called target company with which to negotiate exclusively to reach a contract agreement that’s used as a pattern for pacts with the other two.
Breaking from that tradition the union is negotiating with all three simultaneously. If no tentative agreement is reached by Thursday night’s deadline, the sides can keep talking, or, as Fain has threatened, the union could strike one or all three.
The economic effects of a strike could be tough for all sides. Workers would receive pay from the UAW’s strike fund but it would be much less than they earn on the job.
That fund could last awhile if the union strikes against one automaker at a time. However, “For just the workers there they go go against all three, they’ll exhaust it three times as fast so it is a double edged sword if the UAW were to where to go against all three UAW,” predicted Patrick Anderson, pricipal and CEO of Anderson Economic Group during a recent presentation for the Automotive Press Association.
He estimated a strike against all three manufacturers resulting in the loss of 10 production days would result in $859 million in direct wage losses.
In all, a 10-day strike against GM, Ford and Stellantis could result in a $5 billion hit to the overall economy, the Anderson Economic Group estimated.
Indeed, Hyundai’s U.S. operations are part of the overall economy and that’s why Munoz is hopeful it can all be settled without an interruption in operations, saying, “I hope everybody will end their discussions in in a good way. No strike is good for anybody.”