The picket lines are gone at the three Ford plants where workers have been on strike for nearly six weeks in some cases. But the strike at the company isn’t quite over, and there’s no immediate end in sight for the strikes at General Motors and Stellantis.
The United Auto Workers union announced a tentative deal with Ford Wednesday night and said workers would be returning to work “soon,” though at this point neither the company nor the union have given details of when that return to work will occur.
The four-and-a-half year contract tentatively agreed to by the union and the company will raise workers’ pay by 11% right away and by at least 25% in total by the time it expires, though it hasn’t quite taken effect yet.
And it includes a return of the cost-of-living adjustment (COLA) to protect workers from rising prices by giving them additional raises based on the government’s inflation reading. The union agreed to give that up in 2009 when GM and Stellantis predecessor Chrysler were in bankruptcy and Ford was losing billions and starved for cash.
When the COLA is combined with the guaranteed pay hikes, members could receive pay increases of more than 30% during the life of the contract, taking the hourly wage for most workers above $40 an hour, or more than $83,000 a year, not counting overtime and profit-sharing.
And pay increases will be even greater for some workers who were being paid at a lower pay tier. Isaiah Goddard is one of those workers. He’s been getting $17 an hour working at Ford’s Rawsonville Component Plant in Ypsilanti, Michigan. His pay will increase 85% to more than $30 an hour, before the pay increases that will occur during the life of the contract.
“It will change my life drastically,” he told CNN Wednesday after the deal was announced. “I have a house so this will be amazing. Not to mention it will make getting gas, buying groceries and paying bills easier. I could go from making $500 a week to $1,000 a week. It will make my life so much easier.”
But before the contract can take effect, it needs to be approved by both a council of local union officials who represent Ford workers nationwide, and then by a vote among the 57,000 rank-and-file UAW members at Ford.
Generally union members do not return to work when a tentative agreement is reached until after a ratification vote is concluded. But the union said the decision to have Ford workers return to work was done deliberately to increase pressure on GM and Stellantis to reach their own deals along the same lines as what Ford has agreed to.
“Like everything we’ve done in this stand-up strike, this is a strategic move,” said UAW Vice President Chuck Browning, the union’s lead negotiator with Ford, in a recorded message he and UAW President Shawn Fain made Wednesday evening announcing the deal. “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.”
The 29,000 UAW members on strike at GM and Stellantis will remain off the job until deals are reached there, and the union could always add even more GM and Stellantis plants to the strike list, turning the screws on the two holdouts even further.
It has taken targeted action against all three companies since it went out on strike on September 15, when it was targeting one assembly plant at each of the three companies. It remains on strike at three GM and two Stellantis assembly plants, as well as each company’s network of more than a dozen parts distribution centers that supply its dealerships with the parts they need to make repairs.
Both companies said they’re eager to reach their own deals with the UAW.
“We are working constructively with the UAW to reach a tentative agreement as soon as possible,” said GM’s statement.
“We remain committed to working toward a tentative agreement that gets everyone back to work as soon as possible,” said Stellantis.
Will the rank-and-file ratify the deal?
As to the ratification of the deal, approval by the Ford council is almost certain. Approval by the rank-and-file is also likely, but not quite as certain.
There have been several instances in recent years in which rank-and-file members have voted down deals endorsed by their union’s leadership, and in some cases, gone on strike as a result.
Two examples of that occurred with members of the UAW – 10,000 workers at farm and construction equipment manufacturer John Deere in 2021, and 4,000 members at heavy truck manufacturer Mack Trucks, who are on strike right now after they rejected a tentative agreement on October 8.
The Mack Trucks deal also had double-digit pay hikes of 10% immediately and 20% over the four-year life of that contract. But it didn’t have the COLA or some of the other gains the union achieved in the deal at Ford.
The John Deere tentative agreement would have paid workers as much as 20% more but over the course of a six-year contract. It also included a return of COLA. But even that wasn’t enough for 73% of the membership after a period of high inflation with the company making record profits. They voted it down, resulting in the start of the strike there in October 2021. They then voted down an even better deal during the course of the strike,
While the deal at Ford achieved many of the union’s key negotiating demands, there were some things it did not achieve.
Fain had vowed to get the company to restore traditional pension plans for workers hired since 2007. While senior workers hired before that have the traditional plan that pays them a set benefit every month they are alive, those hired since 2007 only have a 401(k) retirement account. While the agreement does improve the company contribution to those plans, it does not restore pension plans for the more recent hires who now make up a majority of Ford’s UAW membership.
Management is typically loath to offer traditional pension plans because it put liability for workers’ retirement benefits on the company, no matter how the pension fund’s assets perform. At a press briefing four weeks ago, Ford CFO John Lawler referred to the traditional pension plans as “a plan of the past,” citing the fact that only 12 of Fortune 500 companies still offer them.
The tentative agreement also doesn’t restore retiree health care coverage, another benefit the union lost in the 2007 contract.
And there was no mention Thursday night of the union’s demand that workers at EV battery plants now under construction be included in this national master labor agreement, which GM has already agreed to include in whatever contract is reached.
Getting those battery plants included in the master agreement is a key demand of the union, which says it must have a “just transition” from gasoline-powered cars to EVs. The union is concerned that the change from gas to electric vehicles will mean the end of thousands of jobs for union members now building engines and transmissions, who are paid the same as those workers on the assembly lines, and that those jobs would be replaced by lower-paying jobs at separate factories building EV batteries.
“We have had a breakthrough that not only dramatically changed negotiations, it is going to change the future of our union and future of our industry,” said Fain said at the time he announced the agreement on that issue with GM.
But there was no mention Wednesday that Ford has agreed to the same thing for its battery plants now under construction.
So there are some issues that could prompt rank-and-file members at Ford to vote no on this deal, at which point thousands of them could quickly be back on strike.
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