The United Auto Workers (UAW) union and Ford Motor Co. have reached a tentative agreement that could end a nearly six-week strike at the Big Three automaker.
During a video published online on Oct. 25, UAW President Shawn Fain announced the breakthrough, which features a 25 percent general wage increase across the 4-1/2-year contract. In addition, the union secured a 150 percent raise for current Ford temps through the 2023 agreement, a 33 percent top wage increase, and a three-year wage progression.
Additionally, Ford agreed to reinstate cost-of-living adjustments and the right to strike over plant closures and to eliminate “divisive” wage tiers.
“I want to be clear: We told Ford to pony up, and they did,” Mr. Fain said. “We won things nobody thought was possible.”
According to the union, the value of gains in the tentative agreement is worth four times more than that in the 2019 agreement. Plus, the UAW suggested that the 2023 arrangement offers more in raises than the past 22 years combined.
The new deal, the UAW chief says, paves a path to improve conditions for workers at Ford, the Detroit Three, and the entire auto industry.
“Together, we are turning the tide for the working class in this country,” he added. “We'll move forward together. As a united UAW, back in the fight to save the American dream.”
Industry observers have noted that the UAW’s tentative agreement summary omits future wages and unionization at any of the Big Three’s electric vehicle battery factories they are constructing with Asian companies.
The tentative deal requires approval by local UAW leaders and then ratification by a majority of Ford’s 57,000 union-represented employees. Mr. Fain confirmed that the organization will host a Facebook Live briefing and informational meetings to discuss the agreement.
Ford plans to restart production at the Chicago Assembly Plant, the Kentucky Truck Plant, and the Michigan Assembly Plant, where nearly 17,000 workers walked off the job and hit the picket lines. Roughly 3,000 employees who had been temporarily furloughed are also expected to return to work.
“We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations,” the automaker said in an Oct. 25 statement. “Ford is proud to assemble the most vehicles in America and employ the most hourly autoworkers.”
In the meantime, UAW Vice President Chuck Browning, who led contract negotiations with Ford, noted during the online announcement that autoworkers currently on strike at Ford will return to work during the approval process.
Ford shares rose by almost 2 percent in after-hours trading following the announcement to $11.54; they had gained more than 1 percent in regular trading.
Meanwhile, as operations normalize at Ford, the union’s strike at General Motors and Stellantis will continue.
“We’re going back to work at Ford to keep the pressure on Stellantis and GM,” Mr. Browning said. “The last thing they want is Ford to get back to full capacity while they mess around and lag.”
Biden: ‘Hard Fought’ Negotiation
President Joe Biden applauded the news, saying in a statement that the agreement is the result of a “hard fought, good faith negotiation” between the sides.“This tentative agreement provides a record raise to auto workers who have sacrificed so much to ensure our iconic Big Three companies can still lead the world in quality and innovation,” President Biden said. “This tentative agreement is a testament to the power of employers and employees coming together to work out their differences at the bargaining table in a manner that helps businesses succeed while helping workers secure pay and benefits they can raise a family on and retire with dignity and respect.”
Billions Lost
The UAW strike against the Big Three has so far resulted in more than an estimated $9 billion in economic losses for the automobile industry, according to estimates from the Anderson Economic Group (AEG).The strike has cost workers $488 million in lost wages, dealers and customers are collectively out $1.86 billion, and suppliers have endured a $2.78 billion hit.
“The cost of this strike is now double that of the 2019 UAW strike against General Motors, with significant layoffs among supplier firms, Patrick Anderson, the head of AEG, said in an analyst note. ”Lost wages of striking workers and those laid off because of the strike are nearing a half billion dollars.”
The loss projections don’t include plant closures or layoffs that took effect on or after Oct. 20. They also don’t factor in unemployment benefits, income taxes on wages, or reputational damage to the union or employers.
The implications for the broader economy are unclear; economists have said that the UAW work stoppage has affected a small percentage of the labor force and has been contained to the auto sector.
