UAW and Ford reach tentative contract agreement

The United Automobile Workers and Ford Motor Company have reached a tentative agreement on a new four-year labor contract, the union announced Wednesday, nearly six weeks after the union began a wave of walkouts against the three Detroit automakers.

The union said the deal includes roughly 25 percent wage increases over four years and major gains in pensions and job security, as well as the right to strike over plant closings. The striking Ford called on workers to return to work pending approval of a tentative contract.

The deal will be presented to the UAW council, which oversees relations with Ford, at a meeting Sunday, union president Shawn Fine said in a live broadcast on Facebook. If the council approves, the union will submit contract terms to the company’s 57,000 unionized employees for their decision.

“We made history,” said Mr. Fine said.

Ford released a brief statement saying, “We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations.”

The union continues to negotiate with General Motors and Stellandis, whose brands include Chrysler, Jeep and Ram.

Two weeks ago — when it said it had reached the limit it could afford without hurting its business — Ford offered to raise wages by 23 percent, adjust wages in response to inflation and shorten the time it takes new hires to move up to higher wages. Eight to four years. Other companies have offered similar offers.

But the UAW has pushed for more concessions, increased walkouts and targeted factories that produce some of the automakers’ most profitable models.

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In total, about 45,000 workers at Ford, GM and Stellantis are on strike nationwide, including 8,700 at Ford’s Kentucky truck plant in Louisville, the company’s largest plant, and nearly 10,000 at Ford plants in Illinois and Michigan.

A tentative deal with Ford could increase pressure on other companies to reach an agreement with the union. In the past, when the union reached an agreement with one automaker, tentative agreements with others quickly followed. But that history may not be relevant now, as the UAW never struck all three companies at the same time until this year.

Companies are investing billions to switch to battery-powered vehicles, which they say makes it difficult to pay significantly higher wages. Last week, Ford CEO William C. Ford Jr. said the union’s demands would damage the Detroit automaker’s ability to compete against Tesla and foreign rivals.

“Toyota, Honda, Tesla and other companies like the strike because they know how long it will last and it’s good for them,” he said. “They win, we all lose.”

The UAW makes a different case: Victory in its contract battle with the Big Three will provide momentum for organizing auto workers at other companies as well.

The companies began their walkouts when their union contracts expired in mid-September. It drew immediate support from President Biden, who called on automakers to “secure record deals with record company profits” and briefly joined workers in a walkout at a GM plant near Detroit late last month.

The union initially sought a 40 percent pay increase over four years — which union officials said is in line with the pay increases top executives at the three companies have received over the past four years. Those raises are to offset gains auto workers have received in recent years and concessions given to companies starting in 2007.

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In addition, the union is calling for an end to the practice of paying new hires more than half of the $32 an hour top wage. It seeks cost-of-living adjustments that push wages higher to offset inflation. And reinstatement of pension, enhanced pension and shorter working hours to all workers.

GM and Stellantis faced the most recent expansion of UAW walkouts on Monday when the union called out 6,800 workers at a large Ram pickup truck plant in Michigan and 5,000 at a GM plant in Arlington, Texas. Chevrolet Tahoe, GMC Yukon and Cadillac Escalade.

“If we don’t get a deal, Ford will know what’s coming to them on Wednesday,” said Mr. Fan said. “That’s checkmate.”

On Tuesday, GM reported third-quarter profit of $3.1 billion, a 7 percent decline from the same period last year. Ford is scheduled to report its third-quarter earnings on Thursday.

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