Ford Reaches Tentative Labor Deal With UAW Six Weeks Into Historic Strike
The United Auto Workers secured a new tentative labor deal with $Ford Motor(F.US)$ Wednesday night, potentially ending a six-week strike at one automaker while negotiations continue at $General Motors(GM.US)$ and Chrysler-parent $Stellantis NV(STLA.US)$.
The labor agreement, which is subject to a member vote before being ratified, contains a 25% wage increase during the span of the contract, including an 11% bump in the first year, according to people familiar with the matter. The overall increase, which will be spread out over four years, would put the top wage for assembly workers at around $40 an hour.
Terms of the deal also cut the time it takes for new hires to reach the top wage, to three years from eight in the contract that expired last month, the people said.
If approved by workers, the deal marks the union's biggest contract gains in decades and a resolution to Ford's first UAW national strike in more than 40 years. It covers 57,000 UAW-represented workers at Ford's U.S. operations.
The approval process is likely to take more than a week as the union distributes terms of the deal to its members and holds a vote. It is unclear if workers would return to the factories before the deal is officially ratified.
Ford has described its offer to the union as its richest in history, with record wage increases and improved retirement benefits and terms for temporary workers. Company executives have also warned that significantly higher labor costs would hamper the automaker's ability to compete with rivals that have nonunionized workforces.
Since July, the UAW has been bargaining individually with the three car companies for new labor contracts that would take effect upon worker ratification and run for more than four years. The union represents about 146,000 U.S. factory workers at the three companies.
( Updates to follow as news develops.)
The UAW has also reduced the time it takes for new hires to reach the maximum wage, reducing it to three years from eight previously.
Union leaders are expected to take several days to review the details of any tentative deal that is reached before the UAW makes it public, some of the people said. It is unclear how soon workers would return to the factories, following a proposed labor deal.
The membership must approve the tentative agreement with a majority vote for it to be officially adopted. The contract, which would span more than four years, covers about 57,000 union-represented workers at Ford.
The UAW was poised to strike at the Michigan plant where Ford produces the F-150 pickup truck on Tuesday. However, the automaker moved enough at the bargaining table to avoid the walkout, people familiar with the matter said.
The union and the companies have been bargaining for months to reach new labor deals for about 146,000 U.S. factory workers, in a contentious round of talks that have resulted in UAW leaders and company executives clashing publicly.
The UAW early on came out with some aggressive demands, including a 40% wage hike over four years for its members that would be its largest increase in recent memory. The union has since shown a willingness to budge on its earlier expectations.
Ford's most recent public offer to the UAW included a 23% general wage increase, the return of cost-of-living adjustments to protect against inflation and a quicker progression to top wage for full-time employees.
Executive Chair Bill Ford had called the proposal a record offer that would make UAW employees among the best paid in the world. He also called on the UAW to resolve the "acrimonious" talks, emphasizing that the automaker has to be competitive with its foreign-based rivals and Tesla to support factory workers.
Ford has previously had relatively positive relationships with the UAW, and its last national UAW walkout was more than 40 years ago. But UAW President Shawn Fain responded to the Ford chair by saying the UAW isn't willing to work with the company the way it did in the past.
I want to be crystal clear on one thing. The days of the UAW and Ford being a team to fight other companies are over. We won't be used in this phony competition," Fain said in a livestream address earlier this month.
The union ratcheted up its strike at General Motors and Chrysler-parent Stellantis this week, calling on about 12,000 workers to walk off the job at two highly-profitable plants, one per automaker.
The action at GM's plant in Arlington, Texas, came immediately after the company reported its third-quarter earnings to investors Tuesday. Ford plans to report third-quarter results after market close on Thursday.
GM and Stellantis must separately reach tentative deals with the UAW before their workers return to the factory floor.
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