The recently announced tentative deal between Ford Motor and the United Auto Workers (UAW) is being hailed as a significant victory for employees, with the union referring to it as the best agreement in over 50 years.
UAW Vice President Chuck Browning expressed his enthusiasm for the deal, stating, “We have achieved the most lucrative agreement for our members since the presidency of Walter Reuther.” Reuther, who led the union from 1946 until 1970, was known for his influential leadership.
If approved by the membership, the agreement would result in a substantial wage increase of approximately 25% over the four-year contract period, accompanied by inflation protection. The top wage rate would reach an impressive $40 per hour, equivalent to an annual income of about $80,000 based on a standard 2,000 working hours per year. However, additional earnings from profit-sharing and overtime opportunities would further enhance take-home pay. Moreover, starting wage rates are set to rise by an impressive 68%.
One notable victory for UAW is the inclusion of the right to strike in response to plant closures. However, the matter of whether union representation will extend to workers in Ford’s electric vehicle battery factories was not addressed in the recorded update.
As of now, both Ford and UAW have not provided any comments regarding the agreement.
General Motors (GM) and Stellantis (STLA) will now have the responsibility of finalizing their own agreements, using the Ford deal as a potential model.
Ford Deal Sets the Stage for GM and Stellantis in Ongoing UAW Strike
With Ford successfully reaching a deal amidst the ongoing UAW strike, industry experts expect GM and Stellantis to follow suit this week. This strike has been a significant setback for the auto industry, but Ford’s resolution has provided some optimism, surpassing worst-case fears that had loomed just weeks ago.
A Light at the End of the Tunnel
Initially, concerns were raised about a strike that could potentially last well into November. However, as Ford’s deal nears ratification, the likelihood of an extended strike diminishes.
On October 29th, a crucial leadership meeting will be held with the UAW Ford Council. Should the council vote in favor of the deal, it will subsequently be presented to the UAW members for ratification. In the past, it took approximately nine days for the 2019 tentative agreement to complete all necessary steps of ratification between GM and the UAW, ultimately ending a 40-day strike.
Timescales and Progress
In comparison, Ford’s ongoing strike is now in its 41st day, with expectations that it will likely span around 50 days. As for Stellantis and GM, they have yet to reach the tentative agreement stage.
During midday trading, Ford stock experienced a slight decrease of 0.3%. Simultaneously, the S&P 500 slipped by 0.5% while the Dow Jones Industrial Average fell by 0.2%.