Mercedes US executive warned against unionizing at mandatory meeting, UAW says

An employee does final inspections on a Mercedes-Benz C-Class at the Mercedes-Benz US International factory in Vance, Alabama, on June 8, 2017. (Andrew Caballero-Reynolds/AFP via Getty Images/TNS)
An employee does final inspections on a Mercedes-Benz C-Class at the Mercedes-Benz US International factory in Vance, Alabama, on June 8, 2017. (Andrew Caballero-Reynolds/AFP via Getty Images/TNS)

A high-ranking Mercedes-Benz Group AG executive held a mandatory anti-union meeting this week for the workforce of an Alabama plant the United Auto Workers is trying to organize, the union said.

Michael Göbel, who oversees production in North America and is chief executive officer of Mercedes-Benz U.S. International Inc., addressed employees Thursday at the company’s factory in Vance, Alabama. Göbel suggested that unionization would mean work stoppages, costly dues, and obstacles to conflict resolution, according to an audio recording reviewed by Bloomberg News. “I don’t believe the UAW can help us to be better,” Göbel said.

Mercedes-Benz said the meeting was a routine one “where multiple business topics were covered.”

“In addition, our CEO gave his opinion on the UAW’s current campaign,” company spokesman Edward Taylor said in an email. “In doing so, he emphasized that the decision on unionization is ultimately up to each individual team member and we must respect each other’s opinions.”

Mercedes “will continue to share facts and opinions through open and direct communication to support our team members in making an informed decision,” he said.

The UAW, one of the most iconic U.S. unions, represented around 1.5 million workers half a century ago. Its ranks have since plummeted, in part because auto work shifted to new factories the union failed to organize, many of them belonging to European or Asian automakers.

Last year, populist reformer Shawn Fain won the UAW presidency. He embraced slogans such as “EAT THE RICH” and used new strategies to secure record victories in contract talks for around 150,000 workers the union represents at Ford Motor Co., General Motors Co., and Stellantis NV. After a six-week strike, the union secured terms that will raise many workers’ pay 33% by 2028. Fain is now trying to translate the momentum from those victories into unionization at companies that have long eluded the UAW.

The Alabama plant is the biggest of Mercedes’s U.S. plants. In the U.S., European and Asian automakers compete both with Detroit’s three big unionized automakers and with non-union firms such as Elon Musk’s Tesla Inc.

Unionization can cause companies to pay their workers more, and restricts management’s ability to unilaterally dictate workplace conditions and policies. That would mean less flexibility for executives, and more say for workers.

The Mercedes speech signals a contentious struggle ahead with the UAW, which is mounting an audacious campaign to organize the non-union U.S. plants of 13 automakers, including several European and Asian firms. The UAW’s executive board this week voted to commit $40 million to organizing campaigns among auto and battery workers.

The Mercedes plant in Vance is one of three where the union has signed up more than 30% of the workforce. The others are a Hyundai Motor Co. site that’s also in Alabama and a Volkswagen AG facility in Tennessee. Once the percentage reaches 70%, the UAW will seek formal recognition and collective bargaining.

Mercedes’s official principles include a section on union rights stating that “the company and its executives shall remain neutral” in the event of organization campaigns. It also says “the trade unions and the company will ensure that employees can make an independent decision.”

In Thursday’s remarks to employees, Göbel said workers “shouldn’t have to pay union dues that generate millions of dollars per year for an organization where you have no transparency where that money is used,” according to the recording. “I believe you shouldn’t have to go through strikes, years of negotiation, or complicated processes to communicate and resolve conflicts.”

U.S. law requires unions to disclose information about their budgets and spending.

Göbel also said it’s important “that we all respect different opinions and different viewpoints” and to not let the team become divided.

“Being a high-performing team and family is not always easy,” he added. “It takes everyone’s opinion being respected and considered.”

Unions are more prevalent and powerful in Germany than in the U.S. Mercedes employees in Germany are covered by a union contract, have representatives on the company’s board, and elect members to a works council that has a say in its decision-making.

Failed efforts

The UAW has repeatedly failed in its efforts to organize Mercedes and other foreign or U.S. automakers in recent decades. Organizers have blamed the defeats in part on anti-union campaigning by prominent politicians and management.

“We all know what management is doing: They are panicking about us winning our fair share and winning our union,” Mercedes employee Jacob Ryan said in a statement from UAW. The campaign has already caused the company to make improvements such as raising pay, Ryan said: “Mercedes clearly only listens when we organize, and we’re going to keep at it until we win a better life and win our union.”

(With assistance from Wilfried Eckl-Dorna.)

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