The UAW represents about 2,900 of the 3,300 workers at Volvo’s New River Valley plant. In the first round of negotiations, the company proposed — at least to the UAW’s President, Ray Curry and his team, who recommended it to their members: pay raises, signing bonuses, and lower-priced health care. Yet the workers overwhelmingly rejected the proposal. And then a second one, too.
Finally, they approved a third offer that provided even higher raises, plus lump-sum bonuses.
Volvo conceded that it’s had difficulty finding workers for the Virginia plant but says it offers a strong pay and benefits package “that also safeguards our competitiveness in the market.” Mr. Marchand said in a statement that the agreement will provide employees with a continued “great quality of life” and “will also help secure the plant’s long-term growth and sustainability.”
i) At Volvo Trucks USA, describe the role of the United Auto Workers Union in this scenario. Do you think the role of unions are becoming more important now than prior to the COVID-19 pandemic? Justify your response.
(ii) Critically analyze whether companies, such as in the case of Volvo Trucks USA, will need to revisit aspects of their employee pay structures and compensation packages to prevent worker unrest moving forward from the COVID-19 pandemic.
(iii) As an HR practitioner at Volvo Truck USA, discuss two (2) recommendations to Mr. Marchand on reducing a potential labor shortage in the future.
