DETROIT – Leaders of the United Auto Workers union on Sunday shared more details from its tentative contract agreement with Ford Motor Company, which has been used to establish similar deals with General Motors and Stellantis to likely put an end to this year’s auto strike.
On Wednesday, Oct. 25, the UAW reached a tentative deal with Ford that is four times more valuable than the union’s last agreement made in 2019, union officials say. Though the deal didn’t hit all of the UAW’s demands head-on, the union was able to secure what both it and the carmaker consider a record contract.
The following Saturday, the union reached a tentative agreement with Jeep maker Stellantis. On Monday, Oct. 30, the UAW also reached a tentative contract deal with GM, the lone holdout among the Big Three automakers.
Though the UAW wasn’t engaging in traditional pattern bargaining this year, its demands have been consistent across each of the Big Three, and its first deal made with Ford was said to be used to establish similar deals with the other automakers. Specific details from those deals have not yet been shared.
The Ford deal is in the process of ratification, and has not yet been voted on or approved by the membership. The union’s National Ford Council has approved the tentative deal, and local union leaders will be meeting with officials to go over the details of the agreement next before the deciding votes are cast.
Here’s a breakdown of the highlights of the Ford deal disclosed Sunday by UAW President Shawn Fain and Vice President Chuck Browning.
Wage increases
Citing the Big Three’s billions of dollars in profits amassed over the last several years, the union made wage increases among its top priority during negotiations. After first demanding a more than 40% wage increase, the union lowered its demand to 36%.
As of last week, the UAW settled for a 25% general wage increase offered by Ford, which will amount to even more with reinstated cost of living adjustments. If the deal is ratified, all Ford workers will receive an immediate 11% wage increase, while other members who are not earning the top-tier wage could see immediate increases of 20%-40%.
The eight-year wage progression previously in place has been shortened to three years under the deal, officials said Sunday, meaning a new hire would earn the top available wage after three years on the job.
If the deal is ratified:
- Those with three or more years of seniority will immediately be bumped up to the top rate, officials said.
- Those with two years will be immediately bumped up to 85% of the top wage rate.
- Those with one year will be immediately bumped up to 75% of the top rate.
- Those within their first 52 weeks on the job will be bumped up to 70% of the top rate.
By the end of the contract, the top wage rate will reach $40.20 an hour without cost of living adjustments. With COLA, the top rate is expected to reach $42.60 by 2028.
For skilled trades workers, the top wage rate should reach $50.57 with COLA by the end of the contract.
Workers at Ford’s Sterling Axle Plant and Rawsonville Plant will see even larger immediate raises, since the company has agreed to eliminate tiered wages there. There, wage increases will range from 53%-88%, depending on their hourly rate, officials said.
“UAW members at Ford will receive more in straight general wage increases over the next four-and-a-half years than we have over the last 22 years combined,” Chuck Browning VP said.
Cost of living adjustments
Cost of living adjustments that were suspended in 2009 due to the Great Recession have been reinstated in the tentative Ford agreement. Officials say COLA is expected to add more than $8,800 to every worker’s paycheck throughout the life of the contract.
The agreement also states that COLA will be folded into the base pay going forward. By the end of this new contract, the COLA raises, minus five cents, will be included in the base pay, officials said.
“It’s a major victory that protects us from inflation now, and keeps our base wage growing into the future,” Browning said.
Temporary employees
Another major goal of the union’s was to get “justice” for temporary workers, who they claim have been exploited for years.
Under the tentative agreement, all current temporary workers who have 90 days of employment will be immediately converted to full-time employees upon ratification. Beyond that, any temporary workers who are continuously employed for nine months will be automatically converted to full-time employees, officials said.
Those nine months would count toward their wage progression.
With the reduced wage progression, temporary workers will reportedly receive a 145% wage increase, not including COLA.
Temporary workers will also begin receiving profit-sharing checks in 2024, and will be eligible for paid bereavement leave and jury duty leave.
Profit sharing
Though Ford wanted to cut profit sharing, Browning said, the union was able to secure “enhancements” instead.
An enhanced profit sharing formula will reportedly take effect for the 2023 plan year, and will include Ford Credit. Browning said if the model was in place last year, it would have added an additional $1,200 to workers’ profit sharing checks.
Retirement
Retirement tiers that were introduced in 2007 were not eliminated in this contract, officials said. Still, the tentative agreement does reportedly include some boosts for retirees.
Current retirees will see annual bonuses of five payments of $500 each. Active members with pensions will also get an “increase in the multiplier for the first time since the 2003 contract,” Browning said.
Members who are building their pensions will get an “immediate increase in life income benefit in $5 per year of credited service,” officials said.
Ford will also match 10% for those with 401Ks.
Job security
Autoworkers have been allowed the right to strike over plant closures in the latest deal.
“That means if Ford starts closing a plant, we have the right to strike the entire company,” Fain said Sunday. “That is our most powerful tool against these companies trying to kill our jobs and gut our communities.”
The automaker has also reportedly agreed to include thousands of electric vehicle and battery jobs under the new agreement. Those at Ford’s Marshall Battery Plant Agreement in Michigan and the Tennessee Electric Vehicle Agreement will be included in the company’s national union contract once the majority of its workers are UAW members.
The agreement is a win for autoworkers concerned about their position in an EV-focused future, in which the carmakers are investing billions in their transition away from traditional vehicles. GM previously made a similar concession, and was the first automaker to do so.
Other elements
All eligible Ford autoworkers will receive a $5,000 lump sum ratification bonus if the membership approves the deal. Temporary workers will also receive the bonus.
Officials say the automaker has also agreed to invest billions of dollars into its plants throughout the life of the contract, which will last four years and eight months. UAW’s Fain said the change in the contract’s expiration date allows the union to strike on May 1, which is May Day, also known as International Workers’ Day.
Other elements of the tentative contract include:
- Two weeks paid parental leave.
- And end to tiers on vacations. In-progression workers with 20 years or more in seniority will get additional 40 hours of vacation time.
- Plans can only mandate one week of vacation time to be used for plant shutdowns rather than two weeks.
- Juneteenth is declared a holiday.
Next steps to approve tentative deal
After reaching a tentative contract agreement with Ford, UAW President Fain laid out the following steps that the union will observe in its process to either approve or reject the deal. The same process is expected to be applied for Stellantis and GM autoworkers, as well:
- ✅ Council review: The UAW’s national councils will vote on whether to send the tentative agreement to the entire membership. The UAW National Ford Council has already voted in favor of the Ford deal, and has moved on to the next steps.
- ✅ Share agreement details: If the councils approve the deals, the UAW will share the full details of the deals on social media for all members and the public to review. Leadership shared those details on Sunday, Oct. 29.
- Local union meetings: Regional meetings will be held for local UAW leaders to be walked through the details of the agreements.
- Member vote: The locals will hold informational meetings to review and discuss the tentative agreements, and then members will be able to cast their vote for or against ratification.
If the majority of the UAW members vote in support of the four-year and eight-month contract agreements, they will be ratified and will take effect. Union members also have the power to reject the tentative agreements.
The tentative agreements reached with Stellantis, and GM as of Monday, are on the first step.
“I applaud the UAW and General Motors for coming together after hard fought, good faith negotiations to reach a historic agreement to provide workers with the pay, benefits, and respect they deserve. With this landmark agreement with GM, the UAW has now reached historic tentative agreements with all of the Big Three American automakers. This historic tentative agreement rewards the autoworkers who have sacrificed so much with the record raises, more paid leave, greater retirement security, and more rights and respect at work. I want to applaud the UAW and GM for agreeing to immediately bring back all of the GM workers who have been walking the picket line on behalf of their UAW brothers and sisters.
This historic contract is a testament to the power of unions and collective bargaining to build strong middle-class jobs while helping our most iconic American companies thrive. The final word on these tentative agreements will ultimately come from UAW members themselves in the days and weeks to come.”
President Joe Biden
“The tentative agreements make UAW workers among the best-paid, most benefit-supported manufacturing workers in the world. While these agreements are good news, they do come at a substantial cost.
In addition to the $10 billion economic hit this prolonged strike cost our economy – including workers and businesses outside the Detroit Three – these agreements place additional competitive pressures on our companies and the state.
These agreements will increase the cost of vehicles made by UAW workers by hundreds, even a thousand dollars, and make competing companies’ offerings more attractive. As the home of the Detroit Three and the most automotive manufacturing, Michigan will have to work overtime to send the message that it is open for business.”
Sandy K. Baruah, President and Chief Executive Officer, Detroit Regional Chamber
“Congratulations to the world-class autoworkers of the UAW and world-leading automaker GM for reaching a deal.
“This agreement supports the hardworking men and women of the UAW and ensures that GM can continue to grow and expand right here in Michigan, where they were established over a century ago.
“I urge swift ratification of this deal so we can keep competing with other states and nations to lead the future of mobility.
“I applaud the UAW for standing up for working families and taking action to help us build a stronger middle class in Michigan. Let’s keep showing everyone how we can build the next generation of cars and trucks while supporting workers.
Governor Gretchen Whitmer