Major strikes are winding down to a close as Ford, UAW reach a tentative labor deal after weeks of discussions. The United Auto Workers have been on strike since 15 September, with a walkout staged against the Detroit Big 3—Ford Motors, Stellantis, and General Motors. After 6 weeks of disagreements on submitting to the UAW strike demands, it seems UAW and Ford have reached a tentative agreement. The UAW strike began as the union’s existing contract with the Big 3 came to an end on 14 September. Despite attempts at earlier negotiations, the UAW had multiple demands and the automotive leaders remained reluctant to acknowledge any of them satisfactorily.
With insufficient initiative from the companies, the UAW strike was launched. With the full support of its 150,000 UAW members, the UAW strike began at a Ford plant in Michigan, a Stellantis plant in Toledo, and a General Motors plant in Missouri. More plants were affected over time but with Ford and UAW reaching a tentative labor deal, and Stellantis in tow, the UAW force should soon go back to work. As the UAW deal moves to its final agreement stage with the two automotive giants, the union has also moved to expand on its strike against General Motors.
The UAW walkout and stand-up strike just shifted the balance of the automotive industry. (Image credit – UAW)
Ford, UAW Reach Tentative Labor Deal: What Does This Mean for the Workforce?
Despite the demands being acknowledged as “audacious” by leader Shawn Fain, the UAW deal appears to favor the labor force and meets a large number of their requirements, although not to a full degree. Ford, UAW reached a tentative labor deal with safeguards and hikes in place for both full-time and temporary workers. The UAW contract is set to be another 4.5-year deal with Ford, similar to the one that expired in September.
Ford, UAW Reach Tentative Labor Deal on Wages
According to the UAW contract, workers should soon see a 25 percent wage increase that will be paired with the cost of living adjustments (COLA) that could push the pay rise above 30 percent by 2028. Upon ratification, there should be an initial hike of 11 percent in 2024, with a 3 percent hike every year until the end of the contract, ending 2027 with a 5 percent general wage increase. In line with the UAW strike deal, temporary workers could be the biggest winners with raises of over 150 percent.
The top rate with reference to the common production rate, will land at $42.60 and skilled trades at $50.57. The starting rate should also move up from $18.04 to $30.35, as per UAW Vice President Chuck Browning. A $5000 ratification bonus should also be available soon. UAW and Ford reached a tentative agreement on additional benefits such as 2-week Parental Leave and a Juneteenth holiday are also part of the UAW deal.
“Between wage increases, COLA, annual bonuses to retirees, and other economic gains, there is more value in gains for our members in each individual year of this agreement than the entirety of the 2019 agreement. This deal puts more money on the table than the 2019 agreement, four times over. So when we say historic, we mean it.”
– UAW President Shawn Fain, UAW Livestream
Temporary Workers Are the Biggest Winners as Ford, UAW Reach Tentative Labor Deal
Simply put, a big part of the UAW strike demands was the protection of temporary workers and the abuse of their labor for minimum wages. With the UAW deal, temporary workers should see a wage raise from $16.67 per hour to $21. UAW and Ford reach a tentative agreement on shifting temporary workers to permanent status immediately on ratification, for those with 90 days of employment. New hires henceforth should also be converted from temporary worker status within 9 months of labor on the job, holding on to the possibility of moving from $21 to $41 by the agreement’s end.
From 2024, profit-sharing checks should also be available to temporary workers with the immediate $5000 ratification bonus being extended to them as well. Paid bereavement leave of 5 days and jury duty leave will also be available to them as per the UAW strike deal.
UAW and Ford Reach Tentative Agreement on Hiring-In Rate Schedule
According to the UAW contract as presented by Fain, there will be a significant shortening of the wage progression from 8 years to 3 years overall. Those currently with 3 plus years of seniority and experience should see top-rate wages immediately on ratification of the Ford-Uaw tentative labor deal. While all workers will see the immediate 11 percent raise, those with 3 or more years should see between 11-40 percent top rate numbers soon. New hires will go to the top rate within 3 years of time on the job now.
UAW Deal Retirement Benefits
UAW and Ford reached a tentative agreement on retirement benefits as well. Current retirees should see a five-part $500 annual bonus. Active members with pensions should get an increase in the life income benefit of $5 per year of credited service. 401(k) plans have never been more appealing for UAW workers, with Ford’s contributions moving up to 10 percent. Ford has also agreed to the UAW deal of offering senior workers a $50,000 buyout in order to fill in the workforce with younger blood if desired. This could shift the economic burden of multiple top-wage workers as well, but the numbers will only be more evident in action.
Right to Strike: Ford, UAW Reach Tentative Labor Deal
Apart from wages and COLA, a big part of the UAW strike was the concern over job security. The UAW deal has won its members the right to strike over plant closures and take a stand for themselves if their jobs are dismissed. The UAW contract also included a Marshall Battery Plant Agreement and Tennessee Electric Vehicle Center Agreement, covering transfer rights under the EV segment of their strike concerns.
Adding to the big monetary numbers that are part of the tentative agreement between UAW and Ford, the UAW strike also seems to have resulted in an $8.1 billion dollar investment in renovating factories, according to Reuters.
Overall, as Ford and UAW reach a tentative labor deal, the win appears to be a historic one, not just for automotive workers but unions everywhere. The UAW strike was considered unlikely by many as the Big 3 refused to submit to negotiations before it began, however, 6 weeks on, it is evident the companies required their workforce back. Stellantis has also submitted to the pressure, with a UAW contract that involves plant reopenings and rehiring of workers who have been out of jobs.
The UAW council should be set to meet and ratify the contracts so workers can go back to work with renewed vigor. GM appears to be holding off from settling on an agreement still, but it is unclear how long they will be able to withstand the determination of the UAW strike force.
