Striking Ford employees are heading back to the assembly line today after the United Auto Workers (UAW) union reached a tentative labor deal with the company late on Wednesday. While the agreement has yet to be ratified by union members and all details have yet to be made public, we know it includes a 25 percent wage hike over the life of the four-year contract, improved benefits, and the elimination of some of the tiered wages the union had been fighting against.
Say whatever you want about Ford. But this makes the brand look exceptionally good to the general public. Despite not having the best financial portfolio of the Detroit automakers, the Blue Oval was consistently offering the union the sweetest deals and can now take credit for being the company that finally paid up in hopes of ending the strike.
“For months we’ve said that record profits mean record contracts. And UAW family, our Stand Up Strike has delivered. What started at three plants at midnight on September 15, has become a national movement,” stated UAW President Shawn Fain. “We won things nobody thought possible. Since the strike began, Ford put 50 [percent] more on the table than when we walked out. This agreement sets us on a new path to make things right at Ford, at the Big Three, and across the auto industry. Together, we are turning the tide for the working class in this country.”
Time will tell whether or not the deal works for Ford in the long term. However, the short-term benefits provide the company with an opportunity to claim it cares more about the domestic workforce than its rivals. It also gets to reactivate stalled assembly lines while General Motors and Stellantis continue contract negotiations with the UAW.
Meanwhile, the union gets to do some bragging of its own and made sure to do so in a press release issued Wednesday evening:
The gains in the deal, as outlined by Fain and [UAW Vice President Chuck Browning], are valued at more than four times the gains from the 2019 contract, and provide more in base wage increases than Ford workers have received in the past 22 years. The agreement grants 25 [percent] in base wage increases through April 2028, and will cumulatively raise the top wage by over 30 [percent] to more than $40 an hour, and raise the starting wage by 68 [percent], to over $28 an hour.
The lowest-paid workers at Ford will see a raise of more than 150 [percent] over the life of the agreement, with some workers receiving an immediate 85 [percent] increase immediately upon ratification.
The agreement reinstates major benefits lost during the Great Recession, including Cost-of-Living Allowances and a three-year Wage Progression, as well as killing divisive wage tiers in the union. It improves retirement for current retirees, those workers with pensions, and those who have 401(k) plans. It also includes a historic right to strike over plant closures, a first for the union.
President Fain has frequently been accused of showboating and trying to create a spectacle by his opponents. But the strategy seems to have worked rather well for the union and comes at a time when some members were starting to get antsy about the ramifications of a strike that extended into November. There was a push from within the union to vote on at least one of the deals proposed by the industry going into this week and it appears those members have gotten their wish.
There will also undoubtedly be reports discussing how far away this is from the 40 percent wage increase over four years the union had originally demanded. However, that target was clearly chosen to highlight industry disparities in executive pay. The UAW presumably understood matching the recent pay bumps issued to upper management would have been unsustainable and chose the number as a way to force everyone into talking about the widening disparities in compensation. It also happened to give contract negotiations a lot of overhead.
Compared to previous contract negotiations, the above represents a major victory for the UAW. For all the grandstanding Fain has been accused of, the guy appears to have delivered a major victory for the union.
We’ll see how things play out for Ford. While increased worker pay may encourage automakers to continue offshoring jobs, there’s not a survey in history showing Americans actually support the concept. Gallup polls dating back to 2007 show that roughly 80 percent of the country feels that outsourcing is bad for the U.S. economy and Ford already likes to promote itself as “the most American of all car companies.”
The contract deal represents a golden opportunity for Blue Oval to underline that statement and apply pressure to General Motors and Stellantis. They’ll now have to take on the UAW without a third party shouldering some of the burden.
“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.
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