DETROIT – The United Auto Workers union and Ford Motor
The tentative agreement, which was first reported earlier by CNBC, includes 25% pay increases over the terms of the agreement and will cumulatively raise the top wage to more than $40 an hour, including an increase of 68% for starting wages to over $28 an hour.
It also includes reinstatement of cost-of-living adjustments, a three-year path to top wages and right to strike over plant closures. among other significantly enhanced benefits.
“We told Ford to pony up and they did. We won things nobody thought was possible,” UAW President Shawn Fain said during a video posted online Wednesday night. He said the value of Ford’s offer increased by 50% compared to when the targeted, or “stand-up,” strikes began Sept. 15.
The tentative deal still must be approved by local UAW leaders and then ratified by a simple majority of Ford’s 57,000 union-represented workers. The union will hold informational meetings as well as an online briefing to discuss specifics of the agreement, which will posted online with summaries.
Autoworkers who are currently on strike with Ford will return to work while the union’s approval and voting process occurs, UAW Vice President Chuck Browning said during the video with Fain.
“Like everything we’ve done during this ‘stand-up’ strike, this is a strategic move to get the best deal possible,” Browning, who led Ford negotiations, said. “We’re going back to work at Ford to keep the pressure on Stellantis and GM. The last thing they want is for Ford to get back to full capacity while they mess around and lag behind.”
Ford, in a statement, said it was “pleased to have reached a tentative agreement.” The company is now focused on restarting production at the Kentucky Truck Plant, the Michigan Assembly Plant and the Chicago Assembly Plant, where the union initiated walkouts of roughly 16,600 workers.
Shares of Ford were up roughly 2% during afterhours trading. The stock closed Wednesday at $11.54 per share, up 1.3%. Shares are down less than 1% this year.
The union said gains in the deal 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.
Ford, which reports its third-quarter results after the markets close Thursday, and the union participated in intense bargaining Tuesday and Wednesday to finalize the record deal, sources told CNBC.
The union initiated negotiations with all three automakers at once, breaking from recent history when UAW leaders would bargain with each automaker individually, select a lead company to focus efforts on and then pattern the remaining deals off a leading tentative agreement.
Both GM and Stellantis released statements Wednesday night about continuing to work with the UAW union to reach tentative agreements “as soon as possible.”