Dive Brief:
- Ford confirmed via email that it has reached a tentative agreement on a four-and-a-half-year contract with the United Auto Workers union to end the strike at the automaker. CNBC first reported the news.
- The agreement, subject to ratification by Ford’s roughly 57,000 UAW-represented employees, includes the highest base wage increases that Ford workers received in the past 22 years, according to the UAW.
- Ford’s offer puts added pressure on General Motors and Stellantis to match it, as the UAW historically used pattern bargaining.
Dive Insight:
The UAW National Ford Council is meeting in Detroit on Sunday to review the tentative agreement and vote to send it to members for approval. In the meantime, the union said Ford workers will return to work while the deal goes through the ratification process. If the National Ford Council approves the offer, the UAW plans to host a special Facebook Live to go through the terms of the deal with its members.
As part of the agreement, which increases base wages 25% and runs through April 2028, UAW-represented autoworkers making the top wages at Ford will get cumulative pay increases over 30% and eventually earn more than $40 an hour. Workers making the starting base pay will see their hourly wages jump by 68%, to more than $28, over the life of the new contract.
According to the UAW, Ford’s lowest-paid workers will see a raise of more than 150%, while some will see an 85% wage increase upon ratification.
In addition, the agreement reinstates cost-of-living allowances and ends tiered wages. It also improves retirement benefits for current retirees, workers with pensions and those with 401(k) plans. It also includes the right to strike over future plant closures, the UAW said.
“We won things nobody thought possible,” UAW President Shawn Fain said Wednesday evening in a video message announcing the deal. “Since the strike began, Ford has put 50% more on the table than when we walked out. This agreement sets us on a new path to make things right at Ford, at the Big Three, and across the auto industry.”
Ford says it will now focus on restarting three major plants, including the Kentucky Truck Plant, its biggest and most profitable U.S. factory. UAW members walked off the job there on Oct 11. According to Reuters, the Kentucky plant could restart as early as this week.
“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,” Ford CEO Jim Farley said in a statement.
GM’s latest offer on Oct. 20 provides 23% general wage increases over the next four years, including a 10% wage boost in the first year. Stellantis also offered wage increases of 23% after the UAW rejected its previous proposal, which included a 21% pay bump.
The UAW said the strike will continue at GM and Stellantis until both sides reach an agreement.
