Hyundai, the South Korean automaker, has announced that it will raise hourly pay for its employees in the U.S., following the recent labor contract agreements between the United Auto Workers (UAW) union and Detroit's Big 3 car manufacturers. By 2028, employees at Hyundai plants in Alabama and Georgia will see their hourly wages increase by a total of 25%. This matches the wage increase that UAW members are set to receive from Ford, General Motors, and Stellantis.

This move by Hyundai comes after Toyota and Honda also announced wage increases for their factory workers. Toyota will raise factory hourly wages between 9% and 10% starting in January, while Honda announced an 11% increase. These Japanese car manufacturers have also reduced the time it takes for a starting employee to reach the top pay rate, aligning with the time periods stipulated in the UAW's tentative agreement with the Big 3.

Jose Munoz, Hyundai's chief operating officer, stated that the company aims to maintain competitive wages and benefits that are in line with industry peers. Hyundai currently employs over 15,000 workers in its two U.S. plants, and it is scheduled to open a third factory in Georgia in 2025 for the production of electric vehicles.

Interestingly, Hyundai, Honda, and Toyota do not employ unionized autoworkers, making these raises particularly noteworthy. However, after securing contracts with the Big 3, the UAW has expressed its plans to organize workers at Hyundai, Honda, and Toyota. Labor experts suggest that these recent wage increases are, at least in part, aimed at countering the UAW's efforts to organize U.S. auto plants run by foreign automakers.

During the six-week strike by UAW members at Detroit's Big 3, about 46,000 workers were on strike, affecting dozens of assembly plants and parts facilities. Ultimately, the UAW secured new contracts with the Big 3, granting its members a 25% general wage increase over the next four years and eight months. Harry Katz, a professor of collective bargaining at Cornell University, cautions that despite the pay hikes at nonunion automakers, the UAW may face challenges in unionizing their U.S. plants, given the regions' historical skepticism towards unions.

In conclusion, the recent wage increases at Hyundai, Honda, and Toyota come in response to the UAW's successful negotiations with Detroit's Big 3 automakers. While it remains to be seen whether the UAW will be able to organize nonunion automakers' plants, these raises reflect the pressure faced by nonunion companies to retain their workers amidst a strong labor market and the desire to stay competitive with Detroit's top-tier wages.