Honda Motor Co. will hike the pay of some U.S. employees by 11% following the United Auto Workers’ historic contract victories at the carmaker’s unionized Detroit competitors, according to a company memo seen by Bloomberg.
“Honda continuously reviews our total rewards packages to ensure we remain competitive within our industry,” the company’s human resources business leads wrote in a memo for locations including the Marysville Auto Plant in Ohio, the Indiana Auto Plant and the Transmission Plant in Georgia. “Effective Monday, Jan. 8, 2024, associates on pay progressions will receive base wage increases of 11%.”
Honda’s Indiana Auto Plant in Greensburg, which opened 15 years ago, has 2,700 employees.
Honda spokesman Chris Abbruzzese confirmed the pay raise as well as shortened progression time for production associates at Honda’s U.S. facilities. He said since 2021, Honda has added more than 10 new benefits including childcare reimbursement and a student loan repayment program.
“We will continue to look for opportunities to ensure that we provide an excellent employment experience for Honda associates,” Abbruzzese said in an email.
The UAW’s high-profile strike and record-breaking contract wins are buoying the union’s efforts to organize at nonunion firms where it has long struggled to secure footholds.
This has motivated nonunion companies to boost their own pay if they want to keep the union out. Honda’s move follows Toyota Motor Corp.’s earlier this month to increase the highest wage for most assembly line workers by 9.2% in January.
UAW President Shawn Fain said raises like Toyota’s are a direct result of the UAW’s success, and won’t be enough to stop the union from organizing those companies.
“Toyota, if they were doing it out of the kindness of their heart, they could have chosen to do it a year ago,” Fain said in an interview with Bloomberg News last week.
Under the UAW’s tentative agreements with General Motors Co., Ford Motor Co. and Stellantis NV, union members will get 11% raises as soon as the new contracts are ratified. Over the life of the contract, the automakers agreed to give a 25% wage increase and a restoration in cost-of-living allowance, which takes top pay up 33% over that time, as well as giving new workers a faster progression to the top wage of $42 an hour.
“One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain has said. “When we return to the bargaining table in 2028, it won’t just be with a Big Three, but with a Big Five or Big Six.”