Ahead of the US presidential election to be held later this year, US labor unions are increasingly pressuring Korean battery, automobile, and semiconductor companies in the United States. While unionized workers have already won substantial wage hikes through collective bargaining, non-unionized workers are also raising wages to discourage their unionization.

According to industry sources, Ultium Cells, a battery joint venture between LG Energy Solution and General Motors (GM) reached a tentative deal with the United Automobile Workers (UAW), the largest U.S. manufacturing labor union, on June 10 to raise wages by 30 percent over three years. Workers at the company’s first plant in Ohio joined the UAW in December 2022, shortly after the plant went live. They have been pushing for higher wages ever since.

In August 2023, the two sides agreed to an intermediate wage deal that will increase wages by 25 percent but the labor union’s demands for additional increases resulted in a 30 percent increase. If the tentative agreement passes unionists’ vote later, the final wage level for Ultium Cells workers will be 115 percent higher than in 2022, the UAW forecasts.

This case of Ultium Cells Plant 1 is expected to affect Samsung SDI, SK on and other companies who entered the United States to take advantage of subsidies under the Inflation Reduction Act (IRA). “The UAW is likely to use the template of its agreement with Ultium Cells as templates for battery plants being built by GM’s competitors including Ford and Stellantis,” the New York Times said.

SK on has also seen the planned operation of its plant delayed due to union pressure. In October of 2023, Ford postponed a plan to invest in a joint venture with SK on to build a second plant in Korea to start its operation in 2026, citing losses from a labor strike along with slowing demand for electric vehicles. At the time, Ford said the UAW’s six-week strike disrupted production of 80,000 vehicles and cost the US carmaker $1.3 billion. Ford hammered out a deal with the UAW last year. The agreement was to raise wages by 25 percent over the next four years.

Hyundai Motor Group is also faced with growing union risk in the United States. Hyundai Motor built a manufacturing plant in the U.S. in 2005 and has been union-free until this year. But 4,000 workers at its Montgomery, Alabama, plant will vote on whether to join the UAW this month.

In November 2023, Hyundai Motor’s US subsidiary raised wages for production workers at the Alabama plant by 25 percent over the next four years in an effort to prevent their unionization. However, if the vote leads to the foundation of a labor union at the Alabama plant, the Korean automaker will have to bargain collectively with the UAW over wages like other U.S. automakers such as GM, Ford, and Stellantis. Hyundai Motor will be forced to negotiate with the labor union separately to adjust production for each model which may make it harder for the carmaker to quickly respond to changes in the market.

Samsung Electronics and SK Hynix entered the United States for the purpose of receiving massive semiconductor subsidies from the US government. They are now closely monitoring workers’ moves to unionize. The Communications Workers of America Union (CWA) is expanding its power as the Biden administration which is seeking re-election has publicly supported the CWA. The CWA is an organization representing US tech and media workers.

Recently, the CWA began negotiations with Micron over a plant in Clay, upstate New York. The plant is slated to begin production in 2028. The focus of the negotiations is that when the plant opens, the CWA will not disrupt Micron with picketing, strikes and etc. and Micron will not disrupt the CWA’s promotion of union foundation. If workers at the Micron plant form their labor union, it may negatively affect Intel, TSMC, Samsung Electronics, and SK Hynix, some experts say.

Samsung Electronics is building a semiconductor facility in Taylor, Texas in the United States with an investment of about $40 billion. SK hynix is building an advanced packaging production base for AI memory in West Lafayette, Indiana in the United States by investing $3.87 billion.