Ford, UAW reach tentative deal to end strike including record pay raise

In This Article:

By Joseph White and David Shepardson

(Reuters) -The United Auto Workers (UAW) union reached a tentative labor deal on Wednesday with Ford Motor, the first of Detroit's Big Three car manufacturers to negotiate a settlement to strikes joined by 45,000 workers since mid-September.

The proposed accord, which UAW's leadership must still approve, provides a 25% wage hike over the 4-1/2-year contract, starting with an initial increase of 11%.

The Ford deal, which could help create a template for settlements of parallel UAW strikes against General Motors and Chrysler parent Stellantis, would amount to total pay hikes of more than 33% when compounding and cost-of-living mechanisms are factored in, the UAW said.

"We told Ford to pony up and they did," Fain said in a video post on Facebook, adding that the strike at Ford "has delivered".

In addition to the general wage hike, Fain said the lowest-paid temporary workers would see raises of more than 150% over the contract term and employees would reach top pay after three years. The union also won the right to strike over future plant closures, he said.

The UAW also succeeded in eliminating lower-pay tiers for workers in certain parts operations at Ford - an issue Fain highlighted from the start of the bargaining process, wearing T-shirts with the slogan "End Tiers."

The Ford contract would reverse concessions the union agreed to in a series of contracts since 2007, when GM and the former Chrysler were skidding toward bankruptcy, and Ford was mortgaging assets to stay afloat.

"We know it breaks records," Fain said in a video address Wednesday night. "We know it will change lives. But what happens next is up to you all."

The Detroit automakers have argued that the UAW's demands will significantly raise costs and hobble their electric vehicle ambitions, putting them at a disadvantage when compared to EV leader Tesla and foreign brands such as Toyota Motor, which are non-unionized.

The UAW was preparing to strike at a key Ford facility in Dearborn this week if it had not reached agreement after striking at additional GM and Stellantis facilities this week.

But in an unexpected move that adds pressure on GM and Stellantis, the UAW told Ford workers now on strike to return to their jobs during the ratification process. That means production of Ford Super Duty pickups, Ford Bronco and Explorer SUVs and Ranger trucks could restart this week.

Ford, confirmed the news. "We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations," Ford CEO and President Jim Farley said in a statement. Ford shares rose 2% in after-hours trade.