Hyundai Workers Also Slated for Pay Raise
With Honda having followed Toyota in offering employee raises in the wake of the United Auto Workers (UAW) appearing to have settled contract negotiations in Detroit, the rest of the industry appears to have set off a Domino Rally of wage increases. Hyundai is now offering manufacturing workers more than they were making last year and has promised to bump pay by 25 percent through 2028.
While this is more than the 11 percent being offered by Honda, the Japanese brand had already been slipping in provisions mimicking some of the requests made by unionized labor — namely halving its wage progression timeline and adding new benefits. Toyota had done the same, introducing modest raises before the subsequent 10-percent raise promised following the labor strike.
Hyundai made its announcement on Monday, stating that it would increase factory worker pay by 25 percent by 2028, effectively matching what has been offered to the UAW. While neither the Japanese nor South Korean automakers have explicitly said so, tweaking compensation seems to be a direct response to the UAW issuing plans to unionize more automakers.
Workers employed by Hyundai also received raises earlier this year. The company reported that wage progression at the Alabama factory is already at 2.5 years with staff being offered 25 vacation days following 15 years of service. That’s a lot of service for the extra vacation days. However, the wage progression timeline is among the shortest in the whole industry.
While we don’t have anything official from the manufacturer, the average American working for Hyundai likely earned 26 dollars per hour before the aforementioned pay bumps. That’s rather competitive for anyone starting out on the assembly line. Though Hyundai workers look to start a bit lower than the national average and UAW workers will presumably have the juicier benefits package in most instances — something union leadership will undoubtedly try to use to convince other factories to unionize.
As of now, there has been no news on what Kia has planned. While Hyundai Motor Group is the parent company of both brands, Kia operates as a separate business entity in the United States. Any prospective payment changes would impact Kia Manufacturing Georgia until the Savannah EV Plant (announced earlier this year) is up and running. But we will have to wait to see if the company makes an announcement.
[Image: Hyundai Motor Group]
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Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
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The recent pay increases by Toyota, Honda, Hyundai and other automakers look like payoffs to the workers to try and stay off possible unionization. It will be interesting to see how this plays out. I remember the UAW has made several attempts to unionize the Nissan plant in Tennessee and they have never succeeded.
As alluded to in the article, the non-union shops are seeking parity with the Big Three in order to keep the union at bay.
The biggest and most expensive item they want to avoid is a traditional pension. The accounting of such becomes a BIG burden on balance sheets as the years go by. Also want to avoid guaranteed medical upon early retirement. With the bankruptcy in 2008-09, the Big Three were able to shed some of this burden via a two tier wage system.
The non-union shops will offer cash based incentives (bonus, enhanced 401k match, sick & vacation days) which are expensed in the year incurred as opposed to a financial burden decades into the future.