Having negotiated “record contracts” with the Big Three – and seen the bulk of its rank-and-file members approve them – the United Auto Workers says its work isn’t done.
The union intends to try once more to persuade the rest of the U.S. auto industry’s workers to join the union.
“We’re going to organize like we’ve never organized before,” said UAW President Shawn Fain.
As labor scholars who have studied union finances, we believe this is a formidable objective. On top of the intense corporate resistance from the likes of Tesla CEO Elon Musk, there’s the high cost of waging expensive campaigns in states like Tennessee and Alabama, which have “right-to-work” laws designed to discourage labor organizing.
But the United Auto Workers appears to have the money, know-how and institutional infrastructure to launch these organizing campaigns.
The other 57%
About 146,000 UAW members are employed by General Motors, Ford and Stellantis, the global company that makes Chrysler, Dodge and Ram vehicles in North America. That’s down from 407,000 in 1999.
So far, none of the autoworkers employed by the Big Three’s foreign-based competitors or the U.S.-based electric vehicle manufacturers belong to a union. Each of the Big Three has joint ventures with various foreign-based companies to produce batteries. The workers at only one of these joint venture plants have voted to join the UAW.
Today, the UAW represents 43% of the U.S. automotive workforce in vehicle manufacturing. The other 57%, roughly 190,000 workers, are employed by Toyota, Honda and other foreign companies, and Tesla or another domestic electric vehicle manufacturer. Nonetheless, in comparison to other industries, the degree of unionization in the automotive industry remains about four times as high as for the workforce as a whole.
Intermittent campaigns to persuade autoworkers at nonunion factories in places like Fremont, California, and Chattanooga, Tennessee, have failed over the past four decades.
Employer obstacles
Many U.S. employers have a long history of attempting to avoid unionization.
One such tactic is providing nonunion employees with some of the benefits of belonging to a union, such as raises or better benefits, without the payment of union dues. Toyota, Honda, Hyundai, Subaru and Nissan all announced plans to increase pay for their U.S. employees soon after the 2023 UAW strike concluded.
Fain calls this wave of raises for nonunion automotive workers the “UAW bump,” joking that UAW stands for “you are welcome.” His joke has two meanings: It’s a response to the thanks owed for the increased pay and it’s an invitation for workers employed by those companies to join the union he leads.
The UAW leader also quips that when the union’s new contracts expire in April 2028, it will be negotiating with “the Big Five or Big Six” instead of just GM, Ford and Stellantis. In other words, he is predicting that the UAW will have won organizing campaigns by then with two or three more of the automakers producing the most vehicles in the U.S. – such as Toyota, Honda and Nissan.
UAW’s financial status
In our book, “Trade Union Finance: How Labor Organizations Raise and Spend Money,” we explain that unions remained in relatively strong financial shape from 2006 through 2019 – a period that included the economic upheaval of the Great Recession.
For example, among the sample of 53 national unions whose finances we studied, 49 saw their member-based income from dues and other sources grow by more than 33% during this period.
The UAW’s shrinking ranks led it to raise its dues by 25% in 2014 to offset declining member-based income.
The UAW has yet to disclose what it spent on the 2023 strike against the Detroit Three. Based on reported striker numbers and dates, we estimate that it cost the union approximately US$86 million just in payments to workers eligible for $500 weekly payments from its strike fund.
That most likely left the union with nearly $750 million in its strike fund, which held roughly $825 million before the strike began.
Financing union organizing
Organizing workers employed by automakers that resist unions, such as Tesla, can be expensive.
The union has to pay organizers and cover the organizers’ expenses, and it is responsible for the costs of complying with labor law requirements associated with holding union elections. We do not know the exact costs of organizing campaigns or how much unions spend on them.
We do know that the United Auto Workers spent $4.4 million in 2022 to pay its organizers, or 5.6% of the union’s total payroll. This level of expenditure pales in comparison to the more than $45 million the union spent on strike benefits for its members who went on strike that year – none of whom were employed in the automotive industry.
How can the UAW finance a massive organizing campaign to win over the workers at the likes of Tesla, Honda, Nissan, Subaru, Toyota and Hyundai? We have identified three means of supplementing traditional sources of revenue from dues.
1: Get donations from other labor groups
Unions are free to help out each other through donations made to one another.
One important precedent for this is from the UAW’s earliest days. In 1936, one year after the union got its start, John Lewis, at the time the head of the Committee for Industrial Organization, gave the nascent United Auto Workers $100,000 – over $2.23 million adjusted for inflation – for its organizing efforts.
Labor unions can easily accept donations because they are 501(c)(5) nonprofits. This designation means they don’t have to pay any federal income tax, although that exemption does not apply to the money they spend on electioneering and lobbying. Unlike charities, which in the U.S. are designated as 501(c)(3) organizations, donations to unions are not tax deductible for donors.
2: Team up with other unions
A second approach is for unions to pool their money for organizing another industrial sector.
We’ve found that the United Auto Workers, the United Steelworkers and the International Association of Machinists had a combined $513 million in working capital – money available for them to use as they see fit – in 2022. Some of those funds could help foot the bill for a concerted effort to persuade employees of nonunion automakers to join the union.
And the UAW could tap into these funds to supplement their spending on organizing personnel.
3: Experiment with crowdfunding
Third, rank-and-file members of the United Auto Workers, along with other manufacturing unions, could chip in to cover organizing costs through a crowdfunding campaign by raising money online from donors.
Such a crowdfunding campaign might also draw donations from nonunion autoworkers who favor unionization, or anyone else who wants to see more autoworkers belonging to a union.
Innovative tactics
Spending more money on labor organizing will not suffice. The UAW will also need to rely on creativity and innovative thinking.
The challenges involved with winning over nonunion autoworkers will be far more formidable than its task in negotiating the 2023 contracts with the Big Three.
We believe that the UAW would be wise to again use the element of surprise as it did with its 2023 strike against GM, Ford and Stellantis. One key to its success was how it threw the companies off balance by unpredictably ratcheting up the number of facilities where workers had gone on strike.
Fain and his allies are bound to fare better if they again, as they did with the 2023 strike against the Big Three, shape the narrative through the deft use of social media. That tactic helped the UAW garner grassroots support and keep public opinion on its side.