According to multiple reports, Ford and the United Auto Workers are close to reaching an agreement on a new contract, potentially ending the union’s widening strike against the Detroit Three automakers.
The two sides held productive talks late Tuesday and appear to be close to a tentative agreement on a union contract for 2023, sources said Detroit Free Press On Wednesday.
On September 15, the UAW launched escalating strikes against Ford, General Motors and Stellantis. An agreement with one company could serve as a template for transactions with the other companies.
In talks late Tuesday night, the union made a counteroffer to Ford that would include a 25 percent across-the-board wage increase of 25 percent over the life of a new four-year contract, two people familiar with the talks told the Associated Press.
Previously, Ford, Stellantis and General Motors had all offered wage increases of 23 percent.
Striking United Auto Workers (UAW) members at the General Motors Lansing Delta plant demonstrate in Delta Township, Michigan, in a file photo
United Auto Workers President Shawn Fain (left) and Ford CEO Jim Farley are seen in file photos. Ford and UAW are reportedly close to reaching an agreement to end the strike
A Ford deal would include cost-of-living increases that could push the overall wage increase to more than 30 percent, said the officials, who spoke on condition of anonymity. In addition, employees would continue to receive annual profit-sharing checks.
Ford and UAW representatives did not immediately respond to DailyMail.com’s requests for comment Wednesday afternoon.
Late Tuesday, Benjamin Dictor, a labor attorney with the UAW, cryptically tweeted a photo of Ford headquarters in Dearborn, Michigan, with the words: “A beautiful evening in Dearborn.”
It is still possible that negotiations will fail despite the significant progress.
However, if the UAW succeeds in reaching a tentative agreement with Ford, it would serve as a model for seeking similar contract agreements with GM and Stellantis.
Typically, in previous auto strikes, a UAW deal with one automaker resulted in the other companies matching the settlement with their own settlements.
One of the officials told the AP there was also progress in the union’s talks with GM. However, it was unclear whether any of the automakers had accepted the UAW’s counteroffer to raise wages by 25 percent over four years.
The progress in negotiations came after the union this week pulled out three factories that produce highly profitable pickup trucks and SUVs, adding them to the list of plants already on strike to increase pressure on the companies.
There are currently 46,000 UAW workers on strike at Detroit Three plants across the country, representing about 32 percent of the 146,000 union members at the three companies.
Fain addresses the audience during a rally in support of striking UAW members in Detroit last month
The UAW’s strategy of targeted strikes has hit several US plants and cut billions in sales for the three automakers in Detroit.
It has also spread, leaving some auto parts makers and assembly plants that aren’t currently on strike feeling the heat.
On Tuesday, about 5,000 workers at GM’s Arlington, Texas, assembly plant walked out, halting production of truck-based SUVs that generate huge profits for the company.
A day earlier, UAW President Shawn Fain hired 6,800 workers at the Stellantis Ram pickup plant in Sterling Heights, Michigan.
Two weeks ago, the union struck Ford’s largest and most profitable plant, the Kentucky Truck Plant in Louisville, where 8,700 workers make heavy-duty F-Series pickups and two large SUVs.
In total, about 46,000 workers walked out of factories owned by the three companies in a series of targeted strikes that began on September 15. About 32% of the automakers’ 146,000 union members are currently on strike, surviving on $500 a week in strike pay. Automakers have laid off workers at other plants as parts shortages spread through their manufacturing systems.
Todd Dunn, president of the UAW chapter at the Ford truck plant in Kentucky, said he has heard from people in the union’s leadership that the company is close to an agreement.
“I hear they are moving the needle as aggressively as possible,” Dunn said in an interview Wednesday. “It’s very positive.”
The prospect of a breakthrough, he said, had boosted the spirits of workers, who were willing to stay away from the strike to reach an agreement despite difficult times for some.
Dunn said he believes the strike at his plant moved Ford forward in talks and could help secure the best contract he has seen in 29 years with the company.
Neither the companies nor the union wanted to comment on the talks on Wednesday. Bloomberg News and the trade magazine Automotive News had already reported on the union’s counteroffer of a 25 percent wage increase over a four-year period.
Marick Masters, an economics professor at Wayne State University in Detroit who studies labor issues, said it was not surprising that the union was close to an agreement at this point in the talks.
“I believe Shawn Fain jumped on these assets at this exact time last week because he thought they were close to a deal and this would be additional impetus to cement something,” Masters said. “If you look at the movement and the concessions, they are getting smaller, but they are getting closer to what the union wanted.”
When collective bargaining began in July, the union demanded a 40 percent pay increase over four years and the reinstatement of cost-of-living increases. The union passed cost-of-living increases in 2009 to help companies weather the fallout from the Great Recession.
The UAW is also calling for the restoration of traditional defined benefit pension plans for workers hired after 2007, an end to different pay scales for UAW workers, pension increases for retirees and other benefits.
A key question is whether to expand the national UAW contract to 11 U.S. electric vehicle battery factories. This would essentially ensure that workers there would be represented by the union.
All but one of these plants are joint ventures with South Korean battery manufacturers. GM agreed, but the other companies balked, saying their joint venture partners would have to agree too.
UAW union members picket outside Ford’s truck plant in Kentucky after striking in Louisville on October 12
Typically, in previous auto strikes, a UAW deal with one automaker resulted in the other companies matching the settlement with their own settlements
GM CEO Mary Barra said Tuesday that the offer to include the battery factories in the framework agreement was still open, but that they would have to meet what she called “benefits of economic viability and also operational flexibility.”
Union representation at battery plants is critical to the union because these plants will house many of the jobs of the future as the industry transitions away from gasoline vehicles.
The workers now making engines and transmissions at all three companies will need jobs as their plants shut down.
The progress in contract negotiations follows statements from Ford executives in the last two weeks that their offers, which exceeded those of rivals, were at the limit of how much the company would be willing to pay to resolve the strikes.
All three companies have said they don’t want to incur labor costs so high that they would force price increases and make their vehicles more expensive than those of non-union companies like Tesla and Toyota.
A study this month by Moody’s Investor Service found that annual labor costs in the fourth year of the contract fell by $1.1 billion for Stellantis, $1.2 billion for GM and $1.4 billion for Ford. Dollars could rise. The study assumed a 20 percent increase in hourly labor costs.
Wayne State’s Masters said companies would have to cut other expenses or increase vehicle prices to cover the cost of a new contract. However, prices are constrained by a competitive automotive market, he said.
GM said Tuesday that it is already preparing for additional labor costs and will save $2 billion in fixed costs by the end of 2024. People also look for other savings options.
The company said it lost $200 million in pretax profits in the third quarter due to the strike, and it has lost another $600 million so far in the fourth quarter. After that, it could lose up to $200 million a week, not counting the closure of the Texas plant or further strikes.