UAW workers ratify Daimler Truck deal ahead of vote at Mercedes in Alabama

An aerial view of the Mercedes visitor center and museum near the Alabama manufacturing plant. (Getty)

Members of the United Auto Workers have ratified a new labor contract with Daimler Truck (DTGGe.DE) that includes at least a 25% general wage increase over the four-year deal.

The vote was 94.5% in favor of the new contract, which covers more than 7,300 hourly UAW workers after a tentative agreement was reached in late April, averting a strike at the 11th hour.

The contract covers hourly workers at six facilities in southern states where unionization has traditionally been low, including four factories in North Carolina and parts warehouses in Georgia and Tennessee.

The deal with the German truck maker, which was spun off from what is now automaker Mercedes (MBGn.DE), comes just before votes on whether to join the UAW will be tallied at a Mercedes assembly plant in Alabama.

The deal also includes profit-sharing and cost-of-living adjustments for workers at the maker of Freightliner and Western Star trucks and Thomas Built buses as well as the end of wage tiers that paid those building buses less than those building heavy trucks.

UAW President Shawn Fain said the pay hike matched what workers at the Detroit Three received in talks last fall.

Workers will receive an immediate 10% pay raise, followed by 3% increases six months and 12 months later, Fain said.

The lowest paid workers at Daimler's Thomas Built bus unit will receive raises of more than $8 an hour and some skilled trades workers at there will get more than $17 an hour, Fain said.

Since the deals last fall with the Detroit Three, the UAW has turned its efforts to organizing non-union U.S. plants of more than a dozen automakers.

The UAW clinched a historic victory at a Volkswagen (VOWG_p.DE), opens new tab auto plant in Chattanooga, Tennessee, last month, and workers at a Mercedes auto factory in Vance, Alabama and a nearby battery plant in Woodstock, are going to vote on whether to join the union during the week of May 13.