Strike Threat at Allison Transmission Strips Out Tiers

Forty workers in red t-shirts pose together outside a building with a blue awning.

Allison Transmission workers in Indianapolis made restoring equality through ending contract tiers their priority—and threatened to strike to back up their demands. Photo: UAW.

Fifteen hundred auto workers in Indianapolis made their New Year’s resolution public: unless Allison Transmission agreed to eliminate tiers in wages, benefits, shift premiums, and holidays, they would hit the bricks.

“The fight plan throughout negotiations was ending tiers,” said Phil Shupe, a 10-year assembler on tier two and bargaining committee member. “We weren't going to accept anything from the company that had any more division. We stood firm that we all needed to be equal.”

Workers at Allison make commercial heavy-duty automatic transmissions for fire trucks, school buses, and tanks, as well as hybrid propulsion systems.

Auto Workers (UAW) Local 933 members there hadn’t struck since the 1970s. But in December, they rejected Allison’s offer by 96 percent.

“The company realized this time around that we weren't joking,” said Darrin Nelson, an 18-year employee and a shop committeeperson in skilled trades. “We were walking—making it very clear it was either put up or shut up.”

The company put up a four-year contract, compared to the last six-year contract term. Workers clinched a contract in the nick of time—by presenting a clear picture of what would happen if they walked.

Allison could have lost millions a day in revenue, taken a reputational hit, and lost customers, said Shupe. And even if it tried bringing in scabs, the truck drivers who deliver transmissions to customers wouldn’t cross the picket line. Some were Teamsters; others at Ryder Logistics were fellow UAW Local 933 members.

“We let them know we meant business,” said Shupe.

Workers ratified their new contract by 82 percent on January 16. It hikes starting wages from $14.72 to $20 an hour and increases some workers’ earnings by 150 percent, and eliminates most aspects of the tiers (see box for details).


Allison’s customers include the Pentagon, Volkswagen’s subsidiary Traton SE, Mercedes-Benz Group AG, and PACCAR, a large manufacturer of commercial trucks. These contracts have made big profits for Allison’s shareholders.

Coming off the UAW’s lucrative contract wins at the Big 3 automakers, Allison workers thought it was their turn. They wanted to seize the momentum and win their share of the pie, too.

“We saw that if our CEO was making what their CEOs were making even at a smaller company, we needed to demand more money,” said Monica Nelson, a 17-year job setter, a person who checks the measurements on the machines making sure everything is up to spec. “They [Big 3] did away with the tiers, we needed to do away with the tiers.”

Allison Transmission had raked in $6 billion in profits in the last decade, and more than half a billion in the first three quarters of 2023, according to the UAW. CEO David Graziosi made $9.3 million in 2022, according to Securities and Exchange Commission filings.

Meanwhile, company managers were stingy about replacing broken microwaves.

Ahead of the contract expiration, managers started hauling workers into captive-audience meetings to surface any complaints. At one of these meetings, a worker raised the issue of a broken microwave in the break room.

The manager’s answer was, “I'll have somebody go out there and look at it, but we are not replacing any broken microwave,” recalled Local 933 vice president Andy Davis, who works on the assembly line. “A billion-dollar company is going to be that petty! We work long hours. So you're talking about somebody not even being able to microwave a lunch.”

Davis, with 14 years on the job, didn’t expect any better from company honchos. “But I was really happy to see my union brothers and sisters hear the manager’s response,” he said, “so they could see who we’re dealing with.”


The company had proposed a wage opener mid-contract last February. In a tight labor market, it was having a hard time hiring at $14.72. “People could earn better money at a car wash,” said Davis.

But workers rejected the reopener, near the end of a six-year contract. “If the contract is no longer viable, then let’s start negotiations now,” said Davis. “We’ve got nine months till the contract runs out anyways. Instead of just picking and choosing what you want to do as a company, why don’t we sit down and have an honest discussion about what could benefit everyone?”

Apparently in retaliation, though on the pretext of safety, the company went around the factory floor removing all the chairs—a salve to workers’ sore feet from standing for 10 to 12 hours.

“After we rejected the wage proposal by vote, the supervisors formed a pack,” said Davis. “They moved from department to department, grabbing all of our chairs, putting them on a fork truck and taking them out—laughing and being jerks about it.”


As the November contract expiration neared, workers began organizing across divisions—electing a new shop committee, more representative of the various tiers.

George Freeman, bargaining chair, joked when sitting across from company negotiators that they’d bring in hard-charging, Indiana-native UAW President Shawn Fain. The threat threw management off balance. “They want us to know they are in charge—master and servant,” said Freeman.

But their savior wasn’t Fain, even though workers credited the international for providing legal and communications support. The organization that they built across the plant was the key to their success.

Workers started holding gate meetings to update members on the progress in negotiations, answer questions, and make sure people were united behind the demand to end tiers.

In the last round of negotiations, the company had thrown money around in a signing bonus just before the holidays to entice workers into voting yes for a six-year contract. Monica Nelson wanted to make sure her co-workers didn’t fall for that old trick again.

“They’re offering you $10,000 up front, but you’re locking in on this six-year contract,” she said about the company’s past sign-on bonus. “You need to vote it down and ask for more money on the hour. Because if you get more money on the hour, you can make that $10,000 they gave you in two months.”

The big task was building solidarity after the company had successfully used solidarity-wrecking tiers to keep workers divided. “We had to get everybody on board,” said Nelson. “We had to start getting people to be more unified. If they throw out four people, you don't need to take the overtime. Because if you're taking the overtime, you're basically proving we don't need those four people that they threw out whose jobs were protected by contract language.”

Nelson had these conversations on the floor because she was a floater. But one person couldn’t reach everybody. Monica Nelson and Davis began organizing the meetings outside the plant gates on “red T-shirt Wednesdays,” once every two weeks. The instructions were simple: “Wednesday, 5 p.m. break, front gate, bring your questions, write them down, and we’ll answer them.”

“It started with five to seven people, then it turned into 30 people,” Nelson said. “And when it got to 40 people, the shop committee would come out, with the chairman.” Eventually, they expanded the meetings to a second shift and different plants in the factory complex. They also handed out flyers with charts showing the CEO pay.


For Darrin Nelson, the change was long overdue. He had attended the UAW convention in 2014 as an alternate delegate and concluded it was a big con.

“I thought to myself, ‘This is all for show, because everything’s already predetermined,’” he said. “Nobody has a chance to run for any of these positions, because the convention was set up for the caucus that’s in power to always win.”

So when reformers organized for one-member, one-vote elections in 2021, Nelson threw himself into the project. “The direction that we’ve been going the last 15, 20 years has been absolutely brutal for the membership,” he said. “The only way that things are going to change, from the top down to the local levels, is if we get one-member, one-vote to pass and let the membership as a whole decide on who they want as their elected officials.

“At the end of the day, it’s the results. If you make gains and go in the right direction, you show the membership that things are possible. We got a new leadership who says, ‘Enough is enough, we're gonna walk.’ Because that's the only tool that you have to get them to the table to get the things that you deserve.”


The pact eliminates tiers in wages, holidays, and shift premiums. It adds annual “income protection payments,” rising from $1,000 IN the first year to $1,800 in year four, as part of a hybrid cost-of-living adjustment. The one-time payments are credited against the COLA, so a permanent raise only kicks in to make up the difference when the consumer price index rises more than a certain amount each year. It’s not a true COLA, but a bridge to contract negotiations in 2027. The UAW didn’t win a May Day 2028 contract expiration.

All workers will receive a 5 percent bump for the second shift and a 10 percent premium for the midnight shift. Under the old contract, even the shift differential had tiers: “If a non-traditional employee came in four hours early, they would make 60 cents straight,” said Monica Nelson, a 17-year traditional, or legacy, employee. “If I come in four hours early, I would make 10 percent more on my hourly rate for the whole day.”

Workers made some headway in ending the health care tier, but they didn’t eliminate it entirely. They won two weeks of paid parental leave, a $7,000 ratification bonus, and Juneteenth as a paid holiday.

The union didn’t win pensions, but the company agreed to an 8 percent match on 401(k) contributions. Around 300 traditional legacy employees, meaning people hired before 2008, got an increase to their pension to $59.45 by contract end. That’s on top of a 401(k) matched at 3 percent.

Since the Great Recession, workers had seen their pay and benefits erode. The company introduced tiers in wages and benefits around 2008, eliminating a fully funded pension. It introduced a third tier of health insurance in 2019, putting new hires on a health savings account maxed at $750 for an individual and $1,500 for a family, and a health plan with a deductible of $11,900 for a family.

Legacy workers only had to pay for their copays. Second-tier workers hired after 2008 were paying a $75 monthly premium and $2,000 out-of-pocket max as part of a preferred provider organization.

The new contract eliminates the third tier, moving everyone from the HSA onto the PPO. Legacy employees kept their fully funded health insurance. They had been working without a contract since November.

Luis Feliz Leon is a staff writer and organizer with Labor