After successfully negotiating “record contracts” with the Big Three and obtaining approval from the majority of its members, the United Auto Workers (UAW) is determined to extend its efforts. The union aims to make another attempt at convincing the remaining workers in the U.S. auto industry to join their ranks. UAW President Shawn Fain expressed the commitment to undertake an unprecedented level of organization. As scholars specializing in labor studies and union finances, we recognize this as a substantial undertaking. The challenges include strong corporate resistance, particularly from figures like Tesla CEO Elon Musk, coupled with the substantial expenses associated with organizing campaigns in states such as Tennessee and Alabama, which implement “right-to-work” laws aimed at discouraging labor organizing.
However, the United Auto Workers (UAW) seems well-equipped with the financial resources, expertise, and institutional framework to initiate these organizing campaigns.
As of now, approximately 146,000 UAW members are employed by General Motors, Ford, and Stellantis, the global company manufacturing Chrysler, Dodge, and Ram vehicles in North America. This number has decreased from 407,000 in 1999. Notably, workers at joint ventures between the Big Three and foreign-based companies, responsible for battery production, have shown limited interest in joining the UAW. Presently, the UAW represents 43% of the U.S. automotive workforce in vehicle manufacturing, leaving around 190,000 workers, or 57%, employed by Toyota, Honda, other foreign companies, and domestic electric vehicle manufacturers like Tesla. Despite this, the level of unionization in the automotive industry remains approximately four times higher than the overall workforce unionization rate.
Over the past four decades, attempts to persuade autoworkers at nonunion factories in places like Fremont, California, and Chattanooga, Tennessee, have faced repeated failures. Many U.S. employers, with a historical aversion to unionization, employ tactics like providing nonunion workers benefits typically associated with union membership, such as raises or improved benefits, without requiring the payment of union dues. Following the 2023 UAW strike, several automakers, including Toyota, Honda, Hyundai, Subaru, and Nissan, announced plans to raise pay for their U.S. employees. UAW President Shawn Fain humorously refers to this trend as the “UAW bump,” indicating both gratitude for increased pay and an invitation for workers at these companies to join the union. Fain also playfully predicts that when the UAW’s new contracts expire in April 2028, negotiations will involve the “Big Five or Big Six,” suggesting the union’s anticipation of successful organizing campaigns with additional major automakers, possibly including Toyota, Honda, and Nissan.
UAW’s Financial Position
In our book, “Trade Union Finance: How Labor Organizations Raise and Spend Money,” we highlight that unions maintained relatively robust financial health from 2006 to 2019, encompassing the economic challenges of the Great Recession. Among the 53 national unions in our study, 49 experienced over a 33% growth in income from dues and other sources during this period.
To counter the decline in member-based income due to a shrinking membership, the UAW increased its dues by 25% in 2014. Although the exact expenditure on the 2023 strike against the Detroit Three remains undisclosed, we estimate it cost the union around $86 million solely in payments to eligible workers from its strike fund, leaving approximately $750 million in the fund, which originally held about $825 million before the strike.
Financing Union Organizing
Organizing campaigns targeting automakers resistant to unions, such as Tesla, entail substantial costs, covering organizers’ expenses and compliance with labor law requirements. The UAW spent $4.4 million in 2022 on organizers, constituting 5.6% of the total payroll, a fraction of the $45 million allocated for strike benefits unrelated to the automotive industry.
To finance extensive organizing campaigns, the UAW can explore three supplementary revenue sources beyond traditional dues:
- Donations from Other Labor Groups: Unions, as 501(c)(5) nonprofits, can receive donations from fellow unions. Historical precedence includes a $100,000 donation to the UAW from John Lewis in 1936. While unions enjoy tax-exempt status, donations are not tax-deductible for contributors.
- Collaboration with Other Unions: Unions like the UAW, United Steelworkers, and International Association of Machinists, with a combined working capital of $513 million in 2022, can pool funds to support joint efforts in organizing new industrial sectors.
- Crowdfunding: Engaging rank-and-file members and other manufacturing unions in a crowdfunding campaign could generate financial support for organizing efforts. This approach may attract donations from nonunion autoworkers supportive of unionization.
Innovative Strategies
Merely increasing spending is insufficient; the UAW must leverage creativity and innovation. Overcoming challenges in winning nonunion autoworkers necessitates novel approaches. Replicating the surprise element from the successful 2023 strike against GM, Ford, and Stellantis can prove effective. Utilizing social media adeptly, as demonstrated in the 2023 strike, can shape narratives, garner grassroots support, and maintain favorable public opinion.
