Daimler Trucks workers reach agreement and avoid strike threat in North Carolina

The United Auto Workers union reached a deal at 11 p.m. Friday with Daimler Trucks of North Carolina, giving workers 25 percent raises and averting a financial crisis. The strike was to begin on Saturday.

The union said it was ready to withdraw if it could not agree on a new contract covering 7,300 Daimler employees. The previous contract expired on Friday. The German company owns four factories in North Carolina, where it manufactures Freightliner and Western Star trucks, and Thomas Built buses. The union also represents workers at parts distribution centers in Atlanta and Memphis.

The deal, which includes profit-sharing, automatic cost-of-living increases and equal pay among workers at North Carolina plants, represents a victory for the United Workers union as it tries to expand its power in Southern states where unions have long been weak.

“When the deadline approached, suddenly the company was ready to talk,” Sean Fine, UAW, said late Friday when he announced the agreement, which will give workers raises of at least 16 percent in the first year after the contract is ratified.

The withdrawal could have had national political repercussions. North Carolina is a political battleground state that has a Democratic governor, but President Biden narrowly lost the state in 2020. Biden has indicated he could intervene forcefully to support Daimler workers, which could put him at odds with the state's more pro-business Democrats just months before Election Day.

The UAW had successes in the South. It scored a major victory this month when workers at the Volkswagen plant in Chattanooga, Tennessee, voted to be represented by the union. Workers at a Mercedes-Benz plant in Alabama will vote on whether to unionize in mid-May.

Workers at Daimler Truck, which spun off from Mercedes-Benz in 2021, have been represented by the UAW for several decades. The union adopted a firmer stance after winning the largest wage increases in decades for workers at Ford Motor Company, General Motors, and Stellantis, which owns Jeep, Chrysler, and Ram, after strikes in the three companies last year.

Gains for workers At Daimler It could add momentum to the UAW's push to organize American auto factories, including at companies like Toyota and Tesla.

Workers in North Carolina said they were struggling to make ends meet while Daimler made huge profits. The Stuttgart-based company reported net profits last year of 4 billion euros, or $4.25 billion, an increase of 44 percent over the previous year. Sales in the United States, Canada and Mexico generated more than half of the profits.

The union points out that Thomas Built, whose yellow school buses are a familiar sight, has benefited from millions of dollars in federal subsidies for electric buses. Thomas Built workers are paid less than their counterparts at other plants, but the deal will give them pay increases to make up for the deficit.

“The workers who make the trucks and the workers who make the buses will get equal pay for equal work,” Mr. Fine said.

The agreement also includes provisions aimed at preserving jobs in North Carolina. Workers sought more job security after the company moved some production to Mexico.