UAW-Ford Agreement Scores Big Union Wins on Wages, Benefits, Investments

DETROIT, Oct 29 (Reuters) – United Auto Workers leaders on Sunday approved a tentative deal with Ford ( FN ) that would win at least a 30% pay raise for full-time workers and double pay for others. For the union’s struggle to withdraw 15 years of concessions.

Trading at General Motors ( GM.N ) continued without a deal. UAW President Shawn Fine ordered a walkout at GM’s Spring Hill, Tennessee, engine and assembly plant on Saturday. Fein and GM CEO Mary Barra met Sunday night, sources familiar with the process said.

At Ford, the new deal includes $8.1 billion in manufacturing investments and could give workers up to $70,000 in additional pay over the contract’s 4-1/2-year life.

Cost-saving rules such as paying workers at parts plants less than workers on auto assembly lines were eliminated under the new contract. The deal eliminates all low-wage tiered factories, an issue highlighted from the beginning of the bargaining process.

Temporary workers will double their wages. Permanent workers could see pay rates rise 30% to $42.60 an hour by 2028, including prorated living allowances.

In return, Ford will have the opportunity to offer an unlimited number of $50,000 buyouts to higher-earning older workers. Ford can now replace them with younger workers who have been paid less than three years. Previously, it took eight years for new workers to reach higher wages.

“This is a turning point in the class warfare that has been going on in this country for the last 40 years,” Fein said in a video recording Sunday.

He credited Rich’s deal with the union’s strategy of increasing pressure on Ford through a series of targeted strikes over six weeks: “This deal proves the incredible power that exists when workers aren’t afraid to use it.”

The union backed down on some of its initial demands, which included a 32-hour work week, the restoration of limited pensions and a 40% wage increase over the life of the contract.

Beginning in smaller plants, the UAW expanded the strike to Ford’s lucrative Kentucky heavy-duty pickup factory. The union did the same with GM and Chrysler-owner Stellantis ( STLAM.MI ).

After holding talks with local union leaders in Detroit on Sunday, the UAW released the terms of its new contract agreement with Ford before taking the deal to all union workers for approval.

Terms of contract

According to the UAW terms, Ford will add electric vehicles to existing assembly plants in Louisville and Ohio, investing $1.2 billion in the Louisville assembly plant and $2.1 billion to build electric vans in Ohio.

Ford’s investments include several new hybrid models, including gas-electric hybrid versions of Ford’s largest SUVs, the Lincoln Navigator and Ford Expedition. Ford CEO Jim Farley outlined plans to invest heavily in expanding the automaker’s hybrid lineup as it scaled back plans to expand capacity for all-electric models.

The UAW won contracts that included new battery plants that could create thousands of new UAW members at a planned battery plant in Marshall, Michigan, and the Blue Oval City, a Tennessee electric vehicle center that Ford is building in West Tennessee.

Once unionized, workers at the battery plants would earn the same wages as Ford assembly workers, Fine said.

The UAW-Ford contract offers huge gains for some of the lowest-paid manufacturing workers.

Union leaders will now go to regional meetings to explain the contracts to members, who will then vote on ratifying it.

GM walkout

Shares of GM and Ford have fallen by roughly a fifth since the strike began on September 15. Stellantis shares were down just 1%.

A major sticking point with GM is retiree pension costs, sources told Reuters. GM has more retirees than Ford or Stellandis because its workforce was so large in the 1980s and 1990s.

Fein on Saturday criticized GM’s management’s “unnecessary and reckless refusal to come to a reasonable agreement.” GM said he was disappointed by the UAW’s decision to strike Spring Hill.

The Spring Hill walkout could halt production of GM’s large pickup and assembly of other popular GM vehicles. The company announced last week that the ripple effects of the extended Spring Hill strike cost GM the standoff at more than $400 million a week.

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