VANCE, AL—Workers at two Mercedes-Benz factories in central Alabama voted against allowing the United Auto Workers to represent them, a blow to the union’s campaign to gain ground in the South, where it has traditionally been weak.

The defeat came after Kay Ivey, Alabama’s governor, and other Republican leaders argued that a pro-union vote would choke off the investment that has transformed the state into a major auto producer. The union’s setback dims the chances that it will be able to quickly organize workers at Hyundai and Honda, which also have assembly plants in Alabama.

“This loss stings,” said UAW president Shawn Fain in a statement following the election. “We fight the good fight and continue forward. And the workers here ultimately will win.”

Fain credited the UAW’s unionization effort for improving conditions for workers at the factory. For example, shortly after the UAW won record contracts from the Detroit Three automakers last fall, Mercedes gave its workers a pay increase and eliminated wage tiers. The union also took credit for ousting Michael Goebel, who had been president and CEO of Mercedes USA since 2019. He was replaced April 30 by Federico Kochlowski, who served in multiple leadership roles at Mercedes-Benz in the U.S., China and Mexico. He was named vice president of operations at the plant in 2023.

The vote at the Mercedes plant came just weeks after workers at Volkswagen’s assembly plant in Chattanooga, TN, voted in favor of UAW representation. The union hoped that a second victory would have paved the way for the union to organize more than a dozen additional U.S. factories, including plants run by Hyundai, Kia, Toyota and Tesla.

“The workers in Vance have spoken, and they have spoken clearly!” Gov. Ivey said in a statement. “Alabama is not Michigan, and we are not the sweet home to the UAW.”