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The gap the companies and union must close on wages is not huge. Both automakers have offered the union a wage raise of 23 percent over the life of the contract. To match the tentative Ford deal the UAW leadership accepted, they need to offer 25 percent over 4½ years.
All tentative deals will still require ratification by a majority of each company’s UAW workforce to take effect. If workers reject the agreements, they will continue their strikes.
The six-week strike has rattled the economy and the Biden administration, which is pushing to resolve the work stoppage in an industry that contributes 3 percent of the nation’s gross domestic product.
UAW workers at Ford have agreed to suspend their strike and return to work as they consider the contract offer and plan a ratification vote. The union is expected to agree to similar strike suspensions if it reaches tentative deals with GM and Stellantis.
That would mean a return by all 40,000 striking workers, once the companies are able to restart their giant factories and warehouses. Ford officials have said it will take time to reopen its facilities safely. They’ve also said some suppliers to the auto industry will need time to hire new workers after temporarily shutting down and likely losing some employees during the strike.
Ford workers say they’ve received automated calls from the company telling them Ford will update them soon on their return schedule.
The Ford deal includes the biggest gains the union has won in years. In addition to the wage raise, the agreement provides cost-of-living adjustments to wages that will help raise the top hourly wage by over 30 percent to more than $40 by the end of the contract, union officials said. The starting hourly wage will grow to more than $28 by the end of the contract.
The deal also shortens the time it takes new workers to reach the top wage, and eliminates wage tiers that left newer workers on a lower pay scale, the UAW said. It also boosts Ford’s contribution to retirement accounts, and allows workers to strike over any plant closures during the next contract, an issue of top concern to workers amid an industry-wide retooling for electric vehicle production.
The UAW strike has been the union’s first against all of Detroit’s Big Three automakers at the same time, as workers railed against years of their wages not keeping up with inflation.
The fallout for the automakers has been swift, with General Motors this week saying the strike was costing it $200 million a week — and that was before the UAW walked out of an additional GM plant in Arlington, Tex., on Tuesday.
The contract negotiations have been highly acrimonious, with Fain frequently lashing out against “corporate greed” and lucrative executive compensation. The automakers have at times accused Fain of grandstanding for the cameras instead of engaging in real negotiations — and they have warned that significantly increasing their labor costs will make it hard for them to compete against non-unionized rivals.
Ford Chief Financial Officer John Lawler said Thursday the deal will raise Ford’s labor costs by $850 to $900 per vehicle produced. Ford will still remain profitable, he added.
“There is no doubt about that,” Lawler said. “Yes, this is an increase in cost for us. … When you are in a period of inflation you have to pay your people because it puts a hardship on them. And then you as a company have to find a way to increase your efficiency and productivity.”
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