(Bloomberg) -- Mercedes-Benz Group AG employees in Alabama voted against joining the United Auto Workers, a major blow to the union’s recently reinvigorated efforts to grow its ranks.

Employees voted 2,642 to 2,045 against unionization at two Mercedes plants in Vance and Woodstock, a US National Labor Relations Board spokesperson said. Around 5,200 workers were eligible to vote. The loss may embolden other automakers to more aggressively resist organizing efforts, and it casts doubt on the union’s growth plans in the wake of record contract victories last fall at Detroit’s three big automakers.

“We thank all team members who asked questions, engaged in discussions, and ultimately, made their voices heard on this important issue,” Mercedes said in an emailed statement. The company said it looks forward to “continuing to work directly with our team members” to ensure the workplace “is not only their employer of choice, but a place they would recommend to friends and family.”

The UAW has been trying to capitalize on its Detroit success to organize about 150,000 workers at 14 other carmakers. Its strategy included simultaneously targeting several auto plants in the South, where unions are scarcer and laws and politicians are more hostile.

An overwhelming number of Volkswagen AG workers voted last month to join the UAW. But Mercedes proved to be a tougher target with more resistance from management.

“Mercedes is a better place thanks to this campaign and these courageous workers,” UAW President Shawn Fain told reporters Friday, arguing that their organizing spurred Mercedes to make major changes, including changing its pay system to eliminate wage tiers and replacing the local chief executive officer. “What happens next is up to them. Justice isn’t about just one vote or one campaign.”

The union will continue pursuing its allegations of illegal union-busting by Mercedes, he said. “I’ve lost elections in my life. We learn from it, we move forward. That’s what we intend to do.” 

Employees said the company regularly pulled them into group or one-on-one mandatory anti-union meetings, sometimes lasting over an hour. They were also texted a video this week in which a local pastor and city council member suggested they should preserve their ability “to go directly to the company” with grievances.

The UAW filed complaints in the US and Germany accusing Mercedes of illegal anti-union tactics including firing employees because of their union activism. The US government even took the unusual step of raising concerns about such allegations with Germany ahead of the vote.

Mercedes has denied wrongdoing and said that it respects employees’ right to unionize and would ensure they had the chance to make an informed choice. A Mercedes spokesperson said its meetings about unionization aren’t mandatory.

‘Alabama Model’ 

Governor Kay Ivey has called the UAW campaign a threat to “the Alabama model for economic success.”  

“Alabama is not Michigan,” Ivey said at a local Chamber of Commerce event on May 13. “We want to ensure that Alabama values, not Detroit values, continue to define the future of this great state.”

Jeremy Kimbrell, a veteran of past organizing campaigns and leader of the current one at Mercedes, said this week that he was surprised by the intensity of the opposition.

“Over here, the companies fight us with all the power that they have, and there’s nothing we can do about it — our labor laws are just so weak,” he said. Unlike Germany, “Our laws in the United States allow them to just do whatever they want.”

The UAW’s loss at Mercedes shows the difficulty of organizing at an auto plant in a region where many local politicians are hostile and competing jobs such as retail or fast food pay much worse, according to University of California Santa Barbara labor historian Nelson Lichtenstein. Still, he noted, the UAW suffered several defeats at Volkswagen in Tennessee over the years before winning last month. 

“The UAW has enough momentum to try again both at the Vance plant and at other auto plants in the South,” said Lichtenstein, who wrote a book about the UAW. “At Volkswagen, it took a decade.”

The UAW in February announced committing $40 million to support organizing efforts at non-union auto and battery plants within the next few years, especially in the South. “Any business who thinks today’s loss is the end of the story is naive,” Michael Lotito, who co-chairs the management-side law firm Littler’s Workplace Policy Institute, said in an email. 

The union’s complaints against Mercedes are still pending. The National Labor Relations Board can order management to collectively bargain with employees if it finds that a majority of workers had signed up with a union and that a company committed misconduct that prevented a fair vote. However, such orders could get tied up for years in federal court.

The Mercedes defeat could curb the union’s momentum elsewhere, including Toyota Motor Corp.’s plant in Missouri and Hyundai Motor Co.’s site in Montgomery, Alabama, a couple hours away from Mercedes’ facilities. The UAW said earlier this year that it signed up 30% of the workforce at each of those locations, but it hasn’t announced reaching majority support at either of them since then.

“I would assume that the other companies that the UAW is aiming to organize will respond to the organizing much more like Mercedes did than Volkswagen did,” said former NLRB chair Wilma Liebman, who chaired the agency under President Barack Obama and did legal work for the UAW in past organizing efforts. Still, “I presume it’s not going to be a fatal or permanent setback,” she said. 

--With assistance from Ian Kullgren.

(Updates with management-side attorney’s comment in 17th paragraph. An earlier version corrected the location of a Toyota plant in the 19th paragraph,)

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