UAW nears agreements with both GM and Stellantis

UAW Nears Agreements with GM and Stellantis

Shawn Fain, President of the United Auto Workers, was seen on the picket line at the Stellantis facility in Sterling Heights, Michigan, on Monday. Reports indicate that the union is making significant progress toward reaching agreements that could bring an end to the ongoing strikes at both General Motors and Stellantis.

According to individuals familiar with the negotiations, the UAW is close to finalizing tentative contracts with GM and Stellantis. If successful, these agreements would mark a turning point in the longest auto industry strike in the United States in a quarter-century, which at its peak saw up to 45,000 union members participating. Currently, about 29,000 UAW workers remain on strike at the two companies.

Neither the union nor Stellantis has provided public updates on the negotiations. GM, however, released a statement on Friday evening, saying, “we are working constructively with the UAW to reach a tentative agreement as soon as possible.”

One source revealed that discussions between GM and the union continued through the night until 5 a.m. on Friday, with talks scheduled to resume later that day. Similarly, negotiations between Stellantis and union representatives also extended into the early morning hours.

Both GM and Stellantis are expected to match the 25% wage increase outlined in Ford’s tentative agreement with the UAW, as part of the industry’s pattern bargaining practice. This means that all economic terms, including pay and 401(k) contributions, will need to align with what Ford has already offered, according to sources close to the talks.

The UAW began striking against GM, Stellantis, and Ford on September 15, marking the first time the union has targeted all three automakers simultaneously. On Wednesday evening, the union announced a preliminary deal with Ford after an intense overnight bargaining session.

“There was definitely a lot of movement overnight” in discussions with Stellantis, one insider noted.

The proposed Ford contract still requires approval from the company’s 57,000 UAW members. The ratification process is set to begin Sunday with a meeting of local union leaders in Detroit. Should agreements be reached with GM and Stellantis by Friday, the union could initiate ratification votes for all three companies simultaneously.

Any deals reached with GM and Stellantis will also need to be approved by their respective union memberships before taking effect.

The Ford agreement would grant workers an immediate 11% pay raise upon ratification, with further increases totaling a 25% wage boost by the contract’s expiration in early 2028. Additionally, cost-of-living adjustments will be reinstated to help protect workers’ earnings from inflation.

Combined, these guaranteed raises and COLA adjustments are expected to raise wages by 30%. Employees in lower pay tiers, temporary positions, and new hires will see even larger increases.

Additional Contract Details and Strike Impact

The union has also secured improved pension benefits for long-serving employees with traditional pension plans, as well as higher company contributions to 401(k) accounts for those hired after 2007. However, the union was unable to achieve its goal of reinstating traditional pensions or retiree health coverage for post-2007 hires.

Representing 145,000 workers across the three automakers, the UAW has not called all members to strike at once. Instead, it has strategically targeted specific plants, beginning with 12,700 workers at one assembly facility per company and expanding the strike five times. When the Ford deal was announced, 16,600 Ford employees, 14,200 GM workers, and 14,600 Stellantis employees were on strike.

Recently, the union expanded the strike to include Stellantis’s largest plant in Sterling Heights, Michigan, and GM’s largest facility in Arlington, Texas, shortly after GM reported better-than-expected quarterly results.

GM reported a $200 million loss during the first two weeks of the strike in late September, with an additional $600 million lost in the first three weeks of October. The closure of the Arlington plant alone is estimated to cost GM another $130 million per week, according to Wells Fargo auto analyst Colin Langan.

While Stellantis has not disclosed its financial losses, Langan estimates that the Sterling Heights strike is increasing the company’s weekly losses by $110 million, bringing the total to $200 million per week.

Return to Work and Next Steps

Typically, union members do not return to work until a tentative agreement is ratified. However, the UAW has allowed Ford workers to resume their duties during the ratification process, aiming to pressure GM and Stellantis to finalize their own deals quickly.

“The last thing they want is for Ford to get back to full capacity while they mess around and lag behind,” said UAW Vice President Chuck Browning, the union’s lead negotiator at Ford, in remarks to members on Wednesday night.

Some Ford employees have already returned as the company prepares to restart production, according to Todd Dunn, president of UAW Local 862, which represents workers at Ford’s Kentucky Truck Plant. Others are scheduled to return on Saturday, with the goal of reaching full operational capacity by Monday.