Honda joins Toyota in raising U.S. wages for its auto workers as unionization push looms

Honda Motor Co.’s U.S. unit joined other foreign carmakers in raising their automobile workers’ wages in the wake of historic wins for the United Auto Workers and as the union has vowed to intensify its organizing push.

Honda
7267,
-4.11%
gave U.S. production workers an 11% raise that will go into effect in January. Honda also cut down the time to reach a top wage from six years to three years, and added benefits, the company said Friday.

The Wall Street Journal on Friday first reported the raises, citing a memo it had reviewed.

UAW President Shawn Fain has said numerous times the union wants to expand its base into the nonunionized automobile workforce beyond the Midwest.

At an address to UAW members in mid-October, for instance, Fain said that the UAW was “going to organize non-union auto companies like we’ve never organized before.”

Don’t miss: Ford and GM inventories rise despite UAW strike, but demand concerns linger

U.S. auto workers at foreign carmakers such as Honda and Volkswagen AG
VOW,
-1.12%,
which have their major factories in the Southeast, are not unionized. Neither are auto workers at Tesla Inc.
TSLA,
+2.22%,
which has car-making factories in California and Texas.

Auto workers went on strike for six weeks starting in mid-September, hitting several factories and facilities of Ford Motor Co.
F,
+1.65%,
General Motors Co.
GM,
+0.75%
and Stellantis NV
STLA,
+1.57%.

The labor action, which the UAW dubbed a “stand-up strike,” called on select local unions to stand up and walk out. It marked a break from tradition: Going back decades, the UAW would strike at one company at a time, mostly to save its picket-line firepower and strike fund.

Related: There’s a new Tesla bear in town: EV maker is a ‘very expensive company,’ HSBC says

The new strategy yielded big results, including pay raises of around 25% over the life of the four-year contract plus cost-of-living adjustments, the end of several wage tiers, and better retirement benefits.

At an event Thursday to celebrate the UAW deal and the reopening of a Stellantis factory in Illinois, President Joe Biden seemed to support the UAW’s unionization push.

“I want this type of contract for all auto workers,” Biden said. “And I have a feeling UAW has a plan for that.”

During the UAW strike, some Wall Street analysts said that Tesla would benefit from the increased costs to unionized factories following the labor agreements. One analyst noted that even before any wage increases, the Big Three automakers were paying their workers 38% more than comparable Tesla workers earned.

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