Hyundai Motor workers at Alabama plant may move to join UAW

South Korea’s top automaker Hyundai Motor Co. may see labor challenges at its plant in Montgomery, Alabama as its US manufacturing workers are moving to organize by joining the United Auto Workers (UAW) union.

According to industry officials on Tuesday, about 3,000 employees at Hyundai Motor Manufacturing Alabama LLC (HMMA) might vote next month to decide whether to join the US union.

Currently, HMMA employees have not reached a level to meet the requirements to make a request to the National Labor Relations Board to have an election to vote for or against a union.

Since HMMA’s establishment in 2005, Hyundai Motor has operated the manufacturing plant without a union.

Industry officials and the UAW said more than 30% of Hyundai workers at the Alabama plant have signed union cards – a key first step to joining the US labor union.

The UAW has sought to organize auto factories operated by foreign automakers in the US. Its organizing efforts are gaining strong backing from President Joe Biden before the presidential election.

Hyundai’s Alabama plant marks the first Asian manufacturer to be targeted under an aggressive UAW push to organize foreign companies.

In December, more than 30% of workers at Volkswagen’s US plant in Chattanooga signed authorization cards. Workers at the German automaker successfully voted for the union four months later – the first foreign car maker to do so in the US.

Workers at Mercedes-Benz Alabama passed the 30% authorization threshold in January and are in the middle of a vote on whether or not to join the union.

Workers at other foreign automakers in the US, including Toyota Motor, are also known to be seeking to join the UAW.

While 30% support at Hyundai’s Alabama plant marks a significant milestone, it’s by no means the end. The Detroit-based UAW said it won’t formally seek recognition from companies or file for an election until it reaches 70% support.

HYUNDAI HIKES PAY FOR US FACTORY WORKERS

The UAW is putting pressure on foreign automakers in the US, including reporting to the National Labor Relations Board (NLRB) at the end of last year that three companies, including HMMA, are impeding union formation.

Just like non-union automakers, Hyundai Motor has responded by hiking pay for its US factory workers.

HMMA said it would increase US hourly production workers’ wages by 25% by 2028.

Analysts said Hyundai Motor may face weakened labor flexibility at the Alabama plant if its workers join the union.

In 2022, HMMA was touted as the world’s second most productive assembly plant, contributing to the Korean automaker’s strong sales in the North American market and its rise to the world’s third-largest automaker by volume.

In Korea, Hyundai is also facing tough wage negotiations with its labor union.

Hyundai’s unionized workers are demanding that the company increase bonuses by 900%, introduce a four-hour workday on Fridays, and pay performance bonuses of 30% of last year's net profit.

Hyundai and its sister firm Kia Corp. became Korea’s highest earners in 2023, buoyed by robust sales of pricey cars under the Genesis brand, sport utility vehicles and eco-friendly cars.

Write to Jung-Eun Shin at newyearis@hankyung.com

In-Soo Nam edited this article.