Ford autoworkers were set to begin heading back to work after the United Auto Workers (UAW) union reached a tentative labor deal with the company late Wednesday.
Ford was the first of Detroit’s Big Three car manufacturers to negotiate a settlement to strikes joined by 45,000 workers since mid-September, a deal that will likely set a pattern for reaching deals with General Motors and Chrysler parent Stellantis.
The UAW met on Thursday morning with GM and was to meet with Stellantis later in the day. Sources briefed on the matter say GM and the UAW are fairly close on economic issues.
The Ford agreement, which still must be ratified by union members, includes a 25% wage hike over the life of the 4-1/2-year contract, a boost in retirement contributions, and the elimination of lower-pay tiers for workers in certain parts operations at Ford. It also reduces the time to get to top pay from eight to three years, and the UAW won the right to strike over plant closures.
The UAW told Ford workers they would return to work before ratification. Ford is beginning calling back workers as it works to restarts its three assembly plants that were on strike.
The Ford contract stands as a significant victory for labor, one of many reached this year as workers have walked out or threatened strikes in various industries such as rail, entertainment, shipping and casinos.
One big issue remains the fate of battery plant workers, which the UAW did not discuss in outlining the deal on Wednesday.
Last month, Ford CEO Jim Farley accused the UAW of holding the labor deal “hostage” in a bid to force the automaker to pay workers at new battery plants the same top wages as workers at assembly plants.
The agreement reverses 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. But it is still less than the 40% pay hike, 32-hour-work week and return of defined benefit pensions the UAW initially sought.
The companies are collectively in a better position now, though they have all stated that excessive pay increases would hamstring their ability to compete in coming years against lower-cost manufacturers, including Tesla, the leading seller of electric vehicles.
The deal amounts to total pay hikes of more than 33% when compounding and cost-of-living mechanisms are factored in, the UAW said.
“We know it breaks records,” UAW President Shawn Fain said in a video address Wednesday night. “We know it will change lives. But what happens next is up to you all.”
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.
“We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations,” Farley said.
Ford was down 1.7% in trading on Thursday and GM was down 1.4%.
GM and Stellantis in statements on Wednesday said they were working to secure agreements as soon as possible.
