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When German automaker Mercedes revealed plans to open a new assembly plant in the U.S. in 1993, 19 states started courting the luxury car maker.
Alabama was considered the dark horse. Its proposed site near Tuscaloosa had no major airport, the state had an unskilled workforce and high poverty.
But none of that scared away Mercedes when it chose Alabama that September. The unskilled workforce was low-cost and, crucially, not unionized. The southern states' union opposition and willingness to offer huge financial incentives has led to a foreign car making boom in the region.
Yet autoworkers in the South are watching the current UAW strikes closely. They're left out of the negotiations and any benefits that could come out of them.
But if the United Auto Workers union secures a big bump in pay for their members, the region's foreign auto makers would also likely provide their own raises to stay competitive. It would make the UAW much more attractive in the South, which makes the companies nervous.
"Workers feel that they're going to get the same thing that the UAW is going to get," Morris Mock, a technician at a Nissan plant near Jackson, Mississippi, said.
Southern draw: No unions and big $$ in incentives
Alabama didn't just win Mercedes over because it wasn't favorable to unions. The state also provided incentives of roughly $400 million. Other states in the South have dangled far greater baubles to lure foreign automakers since then. Last year, Georgia and local governments promised Hyundai $1.8 billion in tax breaks, new roads and other benefits in exchange for a new electric vehicle plant in the state.
The incentive war and the lack of unions have made the South the destination of choice for foreign automakers. BMW led the way when it announced a South Carolina plant in 1992. Honda and Hyundai followed Mercedes to Alabama. Nissan went just north of Jackson, Mississippi. Volkswagen chose Tennessee.
Auto workforce has ballooned to tens of thousands
The Biden Administration has also gotten in on the incentives game, this time to encourage foreign automakers to make more of their EVs in America. That could lead to new plants heading to Southern states, like the one in Georgia.
"If it's got to be in the United States it's going to be in the South," said A.J. Jacobs, a professor at East Carolina University and author of "The New Domestic Automakers in the United States and Canada" about the rise of foreign automaker plants in North America.
Jacobs said many of the deals states offered to these plants can pay for themselves over the course of decades when considering the tax revenue and jobs they generate. Alabama went from just a few hundred autoworkers in the early 1990's to about 47,000 today.
But Jacobs warns that these incentives aren't always worth it, especially now that they've shot well past the half billion mark. Just as important as the amount is which company a state is recruiting.
"If you told me that you gave away $500 million in incentives to get a Toyota factory, I'd say go for it," Jacobs said. "There's not too many companies in the world I would say that about. Because once Toyota builds a factory there it's staying. They're not going anywhere."
The South keeps UAW's negotiations in check
While Southern workers could see their wages rise with a UAW win, the North-South tug of war over wages goes both ways. The smaller paycheck in the South makes it harder for the UAW to negotiate for more money as the northern plants try to stay competitive with foreign automakers.
UAW workers are also striking for better pay and benefits at a Mercedes supplier in Alabama – one of the few unionized car part manufacturers in the region. The strike is unrelated to the national strike against the Big Three.
But paycheck size is not the only issue southern workers are paying attention to with the strike. There's also the global transition to electric vehicles.
The overhaul of old plants and construction of new ones to build EVs will create new jobs. But it will also cause the loss of other jobs. Car companies don't need workers trained to build engines for an EV that won't have one, said Mock.
It's still uncertain to Mock if the EV shift will be a net positive for southern workers. It will depend on what comes of the UAW contract, which could lead to similar changes at the foreign automakers' plants. Job security and retraining workers to fit the EV future is a big part of the UAW's fight for its members – and indirectly for southern auto workers too.
"This is one of the most important times in America," Mock said. "The most important times in the labor movement."
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Transcript :
A MARTÍNEZ, HOST:
The United Auto Workers strike is happening in the places we traditionally think of as the center of U.S. car-making, places such as Michigan and Ohio. Their biggest competitors are foreign automakers, which have spent the last three decades opening their factories not in the North, but the South. Stephan Bisaha of the Gulf States Newsroom reports on how an anti-union reputation built the South's auto industry.
STEPHAN BISAHA, BYLINE: Even at a car factory 700 miles south of Michigan, the Motor City still sets the standard.
MORRIS MOCK: We had that Detroit dream mindset. You know what I'm saying?
BISAHA: Morris Mock's been working as a technician at Nissan since the company opened a plant just north of Jackson, Miss., 20 years ago. That Detroit dream is based on the great pay and benefits unions negotiated at places like Ford in the past. But Mock's Nissan plant is not unionized. And, yeah, while he's making good money for Mississippi, he says it's still less than workers in the North, something he sees across any industry.
MOCK: If you work here in the South, in Mississippi in general, you're underpaid.
BISAHA: The thing is that cheap and, just as importantly, not unionized labor is how Southern states attracted the foreign automakers. Since the 1990s, they've opened well more than a dozen plants.
A J JACOBS: All capitalists want that, you know, right (laughter)? I mean, they make more money if they don't have any trouble with the labor.
BISAHA: A.J. Jacobs is a sociologist who wrote a book about foreign automakers opening plants in America. Japanese automakers are especially unprepared for workers walking off their jobs. They operate lean factories, and they don't keep a stockpile of cars like American companies do that help them weather a strike.
JACOBS: You know, I used to drive through Michigan. And you'd see the Ford and General Motors factories with cars everywhere, as far as the eye can see. You don't see that - Japanese car factories, the footprint is tiny.
BISAHA: Now, it wasn't just the Southern anti-union mindset that attracted foreign automakers. The Southern states have also dangled incentives. Georgia, for example, promised Hyundai nearly $2 billion in the form of things like tax breaks and new roads for a new electric vehicle plant. Those deals are a big reason why nearly all foreign auto plants have come South - BMW in South Carolina, Kia in Georgia, Volkswagen in Tennessee, Hyundai and Mercedes in Alabama. These plants are almost exclusively nonunion, but the workers here are closely watching the UAW strike. Morris Mock, the Nissan technician in Mississippi, is one of them.
MOCK: Workers feel that they're going to get the same thing that the UAW is going to get.
BISAHA: That's because Southern plants try to be competitive somewhat with pay. But the North-South tug of war over wages goes both ways. The smaller paychecks in the South make it harder for the UAW to win more money for their members.
MOCK: The Big Three, they're using language like, we must stay competitive. So the more you draw our wages down, the more you can draw their wages down.
BISAHA: Of course, money is not the only issue here. There's also the transition into electric vehicles that is underway around the world. Yes, EVs will mean new jobs building things like batteries, but it will also mean the loss of other jobs. Car companies don't need workers trained to build engines for an EV that doesn't need one, says Mock.
MOCK: Everything's going to be ran off a battery. We have a whole department about to go away. But we need to think about, how do we as workers transition?
BISAHA: Job security and retraining workers to fit in with the EV future is a big part of the UAW's fight for its members and, indirectly, for Southern autoworkers, too.
For NPR News, I'm Stephan Bisaha in Birmingham.
(SOUNDBITE OF BROKEN SOCIAL SCENE'S "I SLEPT WITH BONHOMME AT THE CBC") Transcript provided by NPR, Copyright NPR.