Close to 3,000 workers at the Volvo Trucks North America (VTNA) plant in the US State of Virginia are back on strike. The latest strike action began on Monday, June 7, a day after workers organized by the United Auto Workers’ (UAW) Local 2069 voted to reject a second tentative agreement offered by the company.
The vote on the deal, held on Sunday, June 6, saw over 90% of UAW’s 2,900 members at the VTNA plant vote ‘No’ to the common and hourly language dealing with the general details of the deal and work timings. Over 91% of the members voted ‘No’ to salary language, which includes provisions on wages and benefits.
Following the results of the vote, the union negotiators called to resume the strike despite having endorsed the two earlier rejected contracts. The first period of strike, which began on April 17 this year, was called off by the union negotiators two weeks later, after the first tentative deal was proposed.
In the first contract vote held on May 16, 91% of the workers rejected the deal and pushed for negotiators to go back to the bargaining table. A second deal was proposed four days later, delaying a second strike action. However, workers reportedly argued that the second deal had little to no differences from the first one and was rife with the same fundamental problems that led to the rejection of the first deal.
The key point of contention has been that these deals continue to reinforce the tiered wage system, which leads to a disparity as high as USD 8.3 per hour between the recent hires, labelled “competitive”, and the long-term employees or “core” workers by the end of the five-year contract period.
Workers also expressed unhappiness with the exorbitant rise in medical care costs in the deal, whereby additional healthcare deductibles will double from USD 2,000 a year at the beginning of the contract term to USD 4,000 a year at the end of the contract period. Issues were also raised about terms on work hours and vacations.
Of the 3,300 employees at the VTNA plant in Dublin, Virginia, 2,900 are UAW members. The VTNA plant is the largest producer of Volvo Trucks and heavy vehicles in the world, and is currently in the middle of a massive investment of USD 400 million for adding 600 new positions by the end of the year and advanced technology upgrades to manufacture Volvo’s upcoming electric truck models.
Billions for shareholders, but workers’ benefits cancelled
The company witnessed a massive jump in its revenues during the COVID-19 pandemic, having raked in an income of USD 1.4 billion for the first quarter (Q1) of 2021, compared to USD 860 million in Q1 2020. Volvo’s shareholders’ earnings have also gone up, with share prices nearly doubling from USD 0.28 per share to USD 0.53 per share.
Additionally, the parent company AB Volvo’s board of directors is currently proposing paying shareholders special dividends up to USD 2.28 billion from the proceeds of the sale of its subsidiary UD Trucks in Japan. This will be on top of USD 3.68 billion paid in dividends this year alone.
Meanwhile, workers at the VTNA plant and other Volvo Group subsidiaries are facing stagnating wages and reduced benefits in the name of the COVID-19 pandemic and are pushed into a protracted battle for a fair contract. On Tuesday, June 8, UAW Local 2069 announced that health insurance benefits for striking workers had been cancelled by VTNA. Moreover, reports have emerged that workers are being sent letters threatening permanent termination.