Ford, UAW reach tentative deal to end strike including record pay raise
Send a link to a friend
[October 26, 2023] By
Joseph White and David Shepardson
(Reuters) -The United Auto Workers (UAW) union reached a tentative labor
deal on Wednesday with Ford Motor, the first of Detroit's Big Three car
manufacturers to negotiate a settlement to strikes joined by 45,000
workers since mid-September.
The proposed accord, which UAW's leadership must still approve, provides
a 25% wage hike over the 4-1/2-year contract, starting with an initial
increase of 11%.
The Ford deal, which could help create a template for settlements of
parallel UAW strikes against General Motors and Chrysler parent
Stellantis, would amount to total pay hikes of more than 33% when
compounding and cost-of-living mechanisms are factored in, the UAW said.
"We told Ford to pony up and they did," Fain said in a video post on
Facebook, adding that the strike at Ford "has delivered".
In addition to the general wage hike, Fain said the lowest-paid
temporary workers would see raises of more than 150% over the contract
term and employees would reach top pay after three years. The union also
won the right to strike over future plant closures, he said.
The UAW also succeeded in eliminating lower-pay tiers for workers in
certain parts operations at Ford - an issue Fain highlighted from the
start of the bargaining process, wearing T-shirts with the slogan "End
Tiers."
The Ford contract would reverse concessions the union agreed to in a
series of contracts since 2007, when GM and the former Chrysler were
skidding toward bankruptcy, and Ford was mortgaging assets to stay
afloat.
"We know it breaks records," Fain said in a video address Wednesday
night. "We know it will change lives. But what happens next is up to you
all."
The Detroit automakers have argued that the UAW's demands will
significantly raise costs and hobble their electric vehicle ambitions,
putting them at a disadvantage when compared to EV leader Tesla and
foreign brands such as Toyota Motor, which are non-unionized.
The UAW was preparing to strike at a key Ford facility in Dearborn this
week if it had not reached agreement after striking at additional GM and
Stellantis facilities this week.
But in an unexpected move that adds pressure on GM and Stellantis, the
UAW told Ford workers now on strike to return to their jobs during the
ratification process. That means production of Ford Super Duty pickups,
Ford Bronco and Explorer SUVs and Ranger trucks could restart this week.
Ford, confirmed the news. "We are pleased to have reached a tentative
agreement on a new labor contract with the UAW covering our U.S.
operations," Ford CEO and President Jim Farley said in a statement. Ford
shares rose 2% in after-hours trade.
In statements, GM and Stellantis said Wednesday they are working to
secure agreements as soon as possible.
"This lays the groundwork for the next two contracts and they should
fall in line fairly quickly because all three were within a narrow gap
of each other," Sam Fiorani, vice president of global vehicle
forecasting at AutoForecast Solutions.
[to top of second column] |
A United Auto Workers (UAW) union member wears a pin while
picketing outside Ford's Kentucky truck plant after going on strike
in Louisville, Kentucky, U.S. October 12, 2023. REUTERS/Luke
Sharrett/File Photo
The UAW ratcheted up pressure on the automakers by striking at each
company's most profitable plant - GM's Arlington, Texas assembly
plant, Ford's Kentucky heavy-duty pickup factory and Stellantis' Ram
pickup plant in Sterling Heights, Michigan.
The total economic loss from the auto workers' strike has reached
$9.3 billon, the Anderson Economic Group said earlier this week.
"I think this will be a positive for the stocks," said portfolio
manager Tim Piechowski at ACR Alpine Capital Research, which has
$250 million in investment in GM. Detroit Three shares currently
reflect a scenario worse than the terms of the tentative agreement,
he said.
BARGAINING TABLE
The UAW's campaign for a record contract converged with union
efforts in Hollywood and at delivery giant UPS to win big pay
increases. It also became the focus of attention by U.S. President
Joe Biden and Republican rivals who see Michigan and other auto
states as pivotal to their 2024 campaign strategies.
Biden joined Fain on a picket line last month, and praised the
tentative agreement in a statement Wednesday night as a "testament
to the power of employers and employees coming together to work out
their differences at the bargaining table."
Absent from Fain and Browning's summary of the contract terms
Wednesday was mention of future pay and unionization at new
joint-venture electric vehicle battery factories the Detroit Three
are building with Asian partners.
Because they are owned by separate corporate entities, the
automakers did not have to include those factories in this round of
bargaining. Fain had pushed for assurances that battery plant wages
would be comparable to wages at assembly plants, and expressed
concern that UAW jobs at Detroit Three combustion powertrain plants
would be lost over time to non-union battery operations.
Nonetheless, Harley Shaiken, labor professor at the University of
California, Berkeley, saw the deal as one with far-reaching
implications. "This is a set of negotiations, historically, where
gains made in Detroit would be viewed and adapted by many other
industries across the economy," he said.
Former GM shareholder Jeffrey Scharf of Act Two Investors said the
bottom line for union chief Fain depended on his ability to expand
the union.
"If they can use this as a lever to organize Tesla and companies
like that, he's brilliant. If they fail to organize the other
companies and the differential causes jobs to go out of Detroit and
to the other companies, then he's a failure," Scharf said.
(Reporting by Mrinmay Dey and Shivani Jayesh Tanna in Bengaluru;
Writing by Peter Henderson and Sayantani Ghosh; Additional reporting
by Abhirup Roy; Editing by Cynthia Osterman and Christopher Cushing)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |