DETROIT — The United Auto Workers union said Wednesday it has reached a tentative contract agreement with Ford that could be a breakthrough toward ending the nearly 6-week-old strikes against Detroit automakers.
The 4½-year deal, which still has to be approved by 57,000 union members at the company, could bring a close to the union’s series of strikes at targeted factories run by Ford, General Motors and Jeep maker Stellantis.
“For months, we’ve said record profits mean record contracts,” UAW President Shawn Fain said in a video, above, announcing the agreement. “And UAW family, our stand-up strike has delivered.”
“What started at three plants at midnight on September 15th has become a national movement.”
The Ford deal could set the pattern for agreements with the other two automakers, although no other agreements were announced.
UAW leaders called on members striking all Ford facilities to return to work while the tentative agreement is reviewed and voted on. Said UAW Vice President Chuck Browning: “Like everything we’ve done in this stand-up strike, this is a strategic move to get the best deal possible. We’re going back to work at Ford to keep the pressure on Stellantis and GM. The last thing they want is for Ford to get back to full capacity while they mess around and lag behind.
Browning said that under the agreement, wages are expected to increase by 25% — by 33% when cost of living increases are factored in — to about $40 an hour. Wages for employees starting out would increase by 68%. Over the life of the contract, wages for temporary workers will increase by 150%.
Members would get an immediate 11% raise upon ratification. And Browning said the increases over 4½ years will be equal to all the wage increases union members received over the previous 22 years combined.
More details of the agreement are contained in the video above. Beyond that, full terms of the deal weren’t immediately available. It will be reviewed and voted on by the UAW national council for Ford, which would clear it for a full vote by the union’s 57,000 members at Ford. Between those steps, Fain said, details of the agreement will be spelled out to members in a Facebook Live video.
Ford CEO and President Jim Farley issued a brief statement:
We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations.
Ford is proud to assemble the most vehicles in America and employ the most hourly autoworkers. We are focused on restarting Kentucky Truck Plant, Michigan Assembly Plant and Chicago Assembly Plant, calling 20,000 Ford employees back to work and shipping our full lineup to our customers again.
The agreement is subject to ratification by Ford’s UAW-represented employees. Consistent with the ratification process, the UAW will share details with its membership.
Sources close to the negotiations said the union made a counter-offer to Ford that proposes a 25% general wage increase over the life of a new four-year contract and said that negotiations on Tuesday extended well into Wednesday morning. Previously Ford, Stellantis and General Motors had all offered 23% pay increases.
A Ford deal would include cost-of-living pay increases that could lift the total pay raises above 30%, said the people. In addition, workers would still receive annual profit-sharing checks.
Typically, during past auto strikes, a UAW deal with one automaker has led the other companies to match it with their own settlements.
One of the people said there also was progress in the union’s talks with GM. But it was unclear whether any of the automakers had accepted the UAW’s counter-offer of 25% pay increases over four years.
The progress in the negotiations came after the union this week walked out at three factories that produce highly profitable pickup trucks and SUVs, adding them to the list of plants already on strike in a strategy to intensify pressure on the companies.
On Tuesday, about 5,000 workers at GM’s assembly plant in Arlington, Texas, walked out, halting production of truck-based SUVs that are huge profit makers for the company. A day earlier, the UAW’s president, Shawn Fain, had added 6,800 employees at Stellantis’ Ram pickup plant in Sterling Heights, Michigan.
Two weeks ago the union struck Ford’s largest and most profitable factory, the Kentucky Truck Plant in Louisville, where 8,700 workers make heavy-duty F-Series pickups and two large SUVs.
In all, about 46,000 workers have walked out at factories owned by the three companies in a series of targeted strikes that began Sept. 15. About 32% of the union’s 146,000 members at the automakers are now on strike and getting by on $500 per week in strike pay. The automakers have been laying off workers at other plants as parts shortages have cascaded through their manufacturing systems.
Todd Dunn, president of the UAW local at Ford’s Kentucky Truck Plant, said he was told by people within the union’s leadership that the company is nearing an agreement.
“I’ve heard they are moving the needle as aggressively as possible,” Dunn said in an interview Wednesday. “It’s very positive.”
The prospect of a breakthrough, he said, has raised the spirits of workers who are willing to stay out on strike to reach a deal despite hardships for some.
Dunn said he thinks the strike at his plant had nudged Ford along in the talks and could help yield the best contract he’s seen in 29 years with the company.
Neither the companies nor the union would comment on the talks Wednesday. The union’s counter-offer of a 25% wage increase over four years was reported earlier by Bloomberg News and the trade publication Automotive News.
Marick Masters, a business professor at Wayne State University in Detroit who studies labor issues, said it was not surprising that the union would be close to an agreement at this point in the talks.
“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,” Masters said. “When you look at the movement and the concessions, they’re getting smaller but moving closer to what the union wanted.”
When contract talks began in July, the union sought 40% pay raises over four years as well as the restoration of cost-of-living raises. The union had given up the cost-of-living increases in 2009 to help the companies survive the aftermath of the Great Recession.
The UAW also wants traditional defined-benefit pension plans restored for workers who were hired after 2007, an end to varying tiers of wages for UAW workers, pension increases for retirees and other benefits.
One key issue is whether to extend the national UAW contract to 11 U.S. electric vehicle battery factories. This would essentially ensure that workers there would be represented by the union.
All but one of these plants are joint ventures with South Korean battery makers. GM has agreed to this, but the other companies have balked, saying their joint venture partners must also agree.