In what has been a rather drawn out and historically long autoworkers’ strike, positive signals are emerging as Ford has reached a deal to end the strike at their US facilities.
Since mid-September, around 45,000 of Ford’s unionized employees have been on strike, demanding better wages and benefits. While Ford’s initial negotiation bid was lackluster, the company has since agreed to much higher wage increases and benefits amounts to get back to work.
In a momentous turn of events, the United Auto Workers (UAW) union announced this week that a tentative contract agreement has been reached with Ford. This marks a potential breakthrough in ending the nearly six-week-long strikes that have affected Detroit automakers.
Negotiators proposed a four-year deal that is still subject to approval by the 57,000 union members at Ford. But it promises to pave the way for the resolution of the UAW’s ongoing strikes at factories operated by Ford, General Motors (GM), and Stellantis.
The negotiated terms of the Ford agreement could establish a template for settlements with the other two automakers, where strikes are still ongoing. While it’s not yet clear how the other two auto makers will fare, Ford made a financial commitment a striking 50% higher than the pre-strike stage in mid-September.
This historic agreement, expected to bring relief to union members, could set the stage for similar settlements with GM and Stellantis, whose ongoing strike is now the longest American auto strike in 25 years. The negotiations have illustrated the power of collective bargaining and its ability to address the needs of workers and protect their livelihoods.
Key specifics of the tentative agreement with Ford include a 25% general wage increase for all employees and a cost-of-living raise for most employees (an overall, total wage increase of over 30%). Top-scale assembly plant workers can anticipate earning over $40 per hour by the end of the four-year contract. This wage increase surpasses the 23% initially offered by Ford, Stellantis, and GM at the beginning of negotiations.
Assembly workers will receive an 11% wage increase upon ratification, nearly matching all wage increases accumulated since 2007. Additionally, temporary workers stand to gain substantial wage increases. Some will experience raises of over 150%. Retirees will also receive annual bonuses.
And even more remarkably, for the first time, the union has secured the right to strike in response to company plans to close factories.
The autoworkers’ strike began with demands for better wages and working conditions. They sought substantial pay increases. The wage disparity was a particular concern in the background. As a result, severe disruptions could have resulted due to the loss of manpower and productivity.
Already, GM has had to lay off about 2,350 employees across Indiana, Kansas, Michigan, New York and Ohio at this point. And over 1,500 employees have been laid off across Indiana, Michigan, and Ohio by Stellantis, who is also the parent company of Chrysler, Dodge, Jeep, and Ram. Unfortunately, due to the ongoing strikes, these numbers may very well rise unless a deal can be reached similar to the one with Ford.
For US car buyers, this strike could very well could have resulted in potential shortages and delayed deliveries at Ford dealerships. While this will likely not happen now, there remains the problem of the unresolved strikes with Stellantis and GM, raising the specter of continued disruptions.
These strikes could spell delays and reduced availability of vehicles for US buyers, potentially impacting choices and purchase timelines. While the specifics of these negotiations are yet undisclosed, the Ford agreement underscores the potential magnitude of the issues at hand, making it a pivotal development for the US auto industry.
However, not all models are assembled at union factories. And even if the autoworkers’ strike against Ford had not been successfully resolved, some models would have been unaffected. These models are manufactured in non-union factories, some even in other countries. For example, Mexico has been investing heavily in automotive industry and partnering with Ford specifically.
Ford shares were up 2.7% on Thursday on news of the deal. As of today, the autoworkers’ strike is still on for the other two carmakers. And approximately 29,000 of the UAW’s 146,000 autoworkers remain on strike across more than 40 GM and Stellantis US facilities.
