UAW Autoworkers Strike and Tentative Deal With Automakers

Wednesday - November 1 2023, 01:20 UTC - 1 year ago

According to several media reports, Ford's tentative labor agreement includes a 25% wage increase over the next 4½ years, as well as a cost-of-living allowance restoration. The tentative agreement also includes more rights for temps and much higher contributions to retirement plans. If ratified, Ford's deal would add $6 billion in labor costs. GM and Stellantis could also face extra financial pressure despite having smaller North America workforces.

What are the terms of the contract? .

According to several media reports and the union’s own announcements, Ford’s tentative labor agreement includes a 25% wage increase over the next 4½ years, as well as the restoration of a cost-of-living allowance the UAW lost in 2009. In addition, the tentative agreements also will convert many temporary workers to full-time status, higher pay for temps, the right to go on strike over plant closures and significant increases in contributions to retirement plans. By the end of the period covered by the Ford, GM and Stellantis contracts, the top worker wage at assembly plants will be more than US$40 an hour. All three contracts will expire on April 30, 2028. The Stellantis deal, according to UAW officials, is similar to the one reached with Ford in other ways – as, reportedly, is the one that the UAW agreed upon with GM. The Stellantis agreement also has provisions regarding specific North American plants, including the plant Stellantis had idled earlier in 2023 in Belvidere, Illinois, the UAW said. Stellantis has promised to add 5,000 new jobs at Belvidere and other factories over the next four years, in stark contrast to its previous intention to cut that many jobs during the same period, UAW President Shawn Fain said on Oct. 28. The Ford contract, likewise, calls for more than $8 billion in investments in factories and other facilities, according to the UAW.

Why did workers feel the strike was necessary, and did they achieve their aims? .

The workers knew that the companies had enjoyed big profits over the past several years. GM, for example, earned $10 billion in profits in 2021 and $14.5 billion in 2022. After having made major economic concessions to help the companies survive the Great Recession, stiff international competition and the 2009 bankruptcies of GM and Chrysler – before the latter became a division of Stellantis – UAW members believed they deserved what they’re calling a "record contract" for having contributed to "record profits." .

"The days of low-wage, unstable jobs at the Big Three are coming to an end," Fain said on Oct. 28. "The days of the Big Three walking away from the American working class, destroying our communities, are coming to an end." .

To forge its militant strategy, the union tore a page from the playbook of labor leader Walter Reuther, who led the UAW from 1946 until his death in 1970. Reuther believed that workers deserved a fair share of corporate abundance – just like shareholders and customers.

What happens next? .

The UAW released the full details of the Ford contract to all of its members who are Ford workers on Oct. 29, after its leaders had signed off on it. Rank-and-file members now have to ratify the deal for it to go into effect. The same process will happen with Stellantis on Nov. 2. The separate deal the UAW negotiated with GM will also require ratification. In the meantime, the autoworkers who went on strike will be returning to their jobs.

How will this affect the automakers’ bottom line? .

Some analysts have estimated that Ford’s contract, if ratified, would add $1.5 billion to the company’s annual labor costs. Ford itself said the contract adds $6 billion in additional labor costs, a figure that includes many investments in factory and other facilities the company plans to make. GM must also budget for several billion extra in labor costs, some analysts have said, and Stellantis could also face an extra financial pressure despite its much smaller North America workforce.