UAW, Ford Reach Tentative Agreement To End Six-Week Auto Strike

Update: 

The United Automobile Workers and Ford Motor Company reached a tentative agreement on a new four-year labor contract on Wednesday night. This comes six weeks after UAW initiated strikes targeting Detroit’s Big Three automakers.

UAW provided details about the “record contract” with Ford:

The agreement grants 25% in base wage increases through April 2028, and will cumulatively raise the top wage by over 30% to more than $40 an hour, and raise the starting wage by 68%, to over $28 an hour.

The lowest-paid workers at Ford will see a raise of more than 150% over the life of the agreement, with some workers receiving an immediate 85% increase immediately upon ratification.

The agreement reinstates major benefits lost during the Great Recession, including Cost-of-Living Allowances and a three-year Wage Progression, as well as killing divisive wage tiers in the union. It improves retirement for current retirees, those workers with pensions, and those who have 401(k) plans. It also includes a historic right to strike over plant closures, a first for the union.

“We won things nobody thought was possible,” said UAW boss Shawn Fain Wednesday night in a video posted on X.

Fain continued, “Since the strike began, Ford put 50% more on the table.”

The labor agreement is subjected to an Oct. 29 vote with UAW leadership. Then, it must be ratified by Ford’s 57,000 US hourly workers.

Ford issued a brief statement that said, “We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our US operations.”

As far as labor costs for Ford, Bloomberg Intelligence revealed:

“Ford’s tentative labor agreement with the UAW may increase its costs by more than $900 million in its first year, based on an 11% raise in year one, putting additional pressure on the company’s efforts to enhance its mediocre profitability.”

Those costs will be passed down to the consumer…

“This agreement sets us on a new path to set things right at Ford, at the Big Three and across the auto industry,” Fain said.

UAW continues negotiating with General Motors and Stellantis.

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One week after United Auto Workers boss Shaw Fain targeted Ford Motor Company’s largest and most profitable plant in Kentucky, sources tell AP News that the union appears to be inching closer to a tentative contract agreement with the automaker that could end the six-week strike.

Two people familiar with discussions said UAW made a counter-offer to Ford of a 25% general wage increase over the new four-year contract. They said Tuesday talks between the union and automaker extended well into Wednesday morning. Ford has previously offered UAW a 23% pay hike.

They added that Ford would include cost-of-living pay adjustments that could send pay increases above 30%, and workers would receive annual profit-sharing checks.

 

It’s still possible that contract talks could sour, and UAW boss Fain could hit Ford with a ‘surprise‘ labor action, sort of like what happened last week when Ford’s Louisville plant, which makes Ford Super Duty pickups, the Ford Expedition, and the Lincoln Navigator SUVs, was hit with an 8,700-member UAW strike.

The progress with Ford comes a day after the UAW hit General Motors’ largest and most profitable SUV plant in Arlington, Virginia, with a 5,000-member strike on Tuesday. Sources say there has been some progress in labor talks with GM.

As of Wednesday, 46,000 UAW workers are striking across all three automakers, or about 32% of the union’s 146,000 members.

“I think that Shawn Fain struck these plants at this particular time over the past week because he thought they would be near a deal and this would be the extra nudge to get something cemented,” Marick Masters, a business professor at Wayne State University in Detroit, told AP.

Masters continued, “When you look at the movement and the concessions, they’re getting smaller but moving closer to what the union wanted.”

During GM’s earnings report on Tuesday, CFO Paul Jacobson said, “We can’t get ourselves in a situation of signing a deal that we can’t afford to pay or that doesn’t allow us to compete in the global marketplace.”

And this.

Thanks, UAW.