Mercedes-Benz employees at two of the German automaker's facilities in Alabama have voted against joining the United Auto Workers, dealing a blow to the labor group's effort to make deeper inroads in Southern states.

Mercedes Workers voted 2,045 to 2,642, or 56% to 44%, against joining the UAW, the National Labor Relations Board said Friday. For the union to prevail, it needed to get 50% plus one of valid votes cast.

"This is obviously not the result we wanted," UAW President Shawn Fain said in a news conference after the results were tallied. "With weak labor laws in place, enforcement can be a struggle, and sometimes these companies can turn things around."

"This is a setback, this is the same playbook they always follow — it's ugly, it's brutal and it's wrong," Fain added of UAW claims that Mercedes had threatened and even fired workers to snuff out support for the union.

Mercedes reiterated prior denials that it had fired workers because of their organizing activities.

"Our goal throughout this process was to ensure every eligible team member had the opportunity to participate in a fair election," the automaker said in a statement. "We thank all team members who asked questions, engaged in discussions, and ultimately, made their voices heard on this important issue."

The election for production and maintenance workers at the Mercedes plants near Tuscaloosa comes less than 30 days after Volkswagen workers in in Chattanooga, Tennessee, voted to join the UAW. 

David Johnston, 26, an employee at the Mercedes battery plant in Woodstock, had expected the UAW to prevail in its first election at the plant. "I'm really optimistic and expect numbers similar to Volkswagen," he told CBS MoneyWatch on Thursday, a day ahead of the count. "We've had the same old tactics from Mercedes for years now, and most of us are ready for some stability and better work-life balance."

The UAW has vowed to commit $40 million through 2026 to widen its reach to additional auto and electric vehicle workers, including in Southern states, where BMW, Honda, Hyundai, Kia and Nissan also have operations.  

The UAW has been on a roll since winning major concessions last fall from Ford, General Motors and Chrysler-owner Stellantis, where workers gained 33% pay hikes in contracts that will expire in 2028.

Top-scale production workers at GM, who now earn about $36 an hour, will make nearly $43 an hour by the end of their contract, plus annual profit-sharing checks. 

"That's what finally got people talking about a union. In the South it's hush-hush, but after the Big Three win everyone would talk," said Johnston, a father of two who makes $26.50 an hour. 

The union also recently reached an agreement with truck and bus manufacturer Daimler Truck, averting a potential strike by more than 7,000 workers in North Carolina. Daimler is a spinoff from what is now Mercedes.

"We're a luxury brand, and I'm missing the first year of my daughter growing up," said Johnston, who is switching to a new job at the Mercedes assembly plant in Vance, a move he said would mark his seventh schedule change since he started with the company in August of 2022. One role involved working 12 hours a day, seven days a week, he added.

"Red-hot opposed"

Mercedes has waged a concerted effort to dissuade workers from unionizing, according to workers in Alabama and labor experts. The company also announced that it would eliminate a two-tier pay system that resulted in more recent hires being paid substantially less. 

In contrast to Volkswagen, where the UAW narrowly lost two previous votes and faced less vehement opposition to its workforce's union drive, "Mercedes is red-hot opposed," said Harley Shaiken, a labor expert and professor emeritus at the University of California, Berkeley, noting that Mercedes hired a consulting firm and coordinated with local political leaders to fight the UAW. 

Mercedes is accused of disciplining workers for discussing a union, firing union supporters and forcing employees to attend meetings while making "statements suggesting that union activity is futile," according to the NLRB. The agency is investigating six unfair labor practice charges filed by the UAW against the company since March.

Mercedes denies interfering with the union campaign or retaliating against employees.

Mercedes' management has gotten backing from Alabama Gov. Kay Ivey, who on Monday said she had signed legislation that revokes tax incentives for corporations that voluntarily recognize labor unions. 

Volkswagen workers in Tennessee vote to join UAW 06:31

"Alabama is not Michigan," the Republican told a Chamber of Commerce function in Huntsville. "We want to ensure that Alabama values, not Detroit values, continue to define the future of this great state." 

Kay was among six Southern governors who signed a letter condemning efforts by the UAW to organize car factories in their states, saying it threatened jobs and values.

—The Associated Press contributed to this report.

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York.

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