‘This will have a major impact on my life’: What lies ahead for the car industry strikes

Ford and UAW Reach Tentative Agreement: What’s Next?

Picket lines have disappeared at three Ford facilities where employees had been striking for nearly six weeks. However, while Ford workers may soon return, the walkouts at General Motors and Stellantis continue with no clear resolution in sight.

The United Auto Workers (UAW) announced late Wednesday that a preliminary agreement had been reached with Ford, signaling that employees would be heading back to their jobs “soon.” As of now, neither Ford nor the union has specified when work will officially resume.

Highlights of the Tentative Deal

The proposed four-and-a-half-year contract promises an immediate 11% wage increase for Ford workers, with total raises reaching at least 25% by the contract’s end—though these changes are not yet in effect.

A key feature of the agreement is the reinstatement of the cost-of-living adjustment (COLA), which will provide additional pay increases tied to inflation. The union had previously given up COLA in 2009 during a period of financial crisis for the automakers.

When COLA is combined with the guaranteed wage hikes, many employees could see their pay rise by over 30% during the contract’s duration. This would push most hourly wages above $40, or more than $83,000 annually, not including overtime or profit-sharing.

Some workers in lower pay tiers will see even larger gains. For example, Isaiah Goddard, who currently earns $17 an hour at Ford’s Rawsonville Component Plant, will see his hourly wage jump by 85% to over $30, with further increases expected as the contract progresses.

“This will be life-changing for me,” Goddard told CNN after the announcement. “Owning a home will be much more manageable, and everyday expenses like gas and groceries will be easier to cover. My weekly income could double, making life far less stressful.”

Strategic Pressure on GM and Stellantis

Before the agreement can be implemented, it must be approved by a council of local union leaders representing Ford workers nationwide, followed by a vote among Ford’s 57,000 UAW members.

Typically, union members remain on strike until a tentative deal is ratified. However, the UAW has chosen to send Ford employees back to work now, aiming to increase pressure on GM and Stellantis to reach similar agreements.

“This is a calculated move,” explained UAW Vice President Chuck Browning in a recorded message with UAW President Shawn Fain. “We’re returning to Ford to ramp up the pressure on Stellantis and GM. The last thing they want is for Ford to resume full operations while they fall behind.”

Roughly 29,000 UAW members remain on strike at GM and Stellantis, and the union may escalate by targeting additional plants if necessary.

Since the strike began on September 15, the union has staged targeted walkouts at all three automakers. Strikes continue at three GM and two Stellantis assembly plants, as well as at numerous parts distribution centers vital to dealership repairs.

Both GM and Stellantis have expressed eagerness to finalize their own agreements with the UAW. GM stated, “We are working constructively with the UAW to reach a tentative agreement as soon as possible.” Stellantis echoed, “We remain committed to working toward a deal that brings everyone back to work quickly.”

Will Workers Approve the Deal?

While approval from Ford’s union council is almost certain, a positive vote from the broader membership is likely but not guaranteed.

In recent years, there have been several instances where union members have rejected deals supported by leadership, sometimes leading to further strikes.

For example, in 2021, 10,000 UAW members at John Deere and 4,000 at Mack Trucks voted down tentative agreements, with the latter group currently on strike after rejecting a deal earlier this month.

The Mack Trucks proposal included immediate double-digit raises and a 20% increase over four years, but lacked COLA and other gains found in the Ford agreement. The John Deere deal offered up to 20% more pay over six years and included COLA, but was still rejected by 73% of members amid high inflation and record company profits, triggering a strike.

What Remains Unresolved

Despite significant wins, the Ford agreement did not fulfill all of the union’s demands.

UAW President Shawn Fain had pledged to restore traditional pension plans for workers hired after 2007. While the contract improves company contributions to 401(k) plans, it does not reinstate defined-benefit pensions for newer employees, who now make up the majority of Ford’s union workforce.

Companies are generally reluctant to offer traditional pensions due to the financial risks involved. Ford’s CFO, John Lawler, recently described such plans as “a thing of the past,” noting that only a small fraction of Fortune 500 companies still provide them.

The tentative agreement also does not bring back retiree health care benefits lost in 2007.

Additionally, there was no mention of including workers at Ford’s new electric vehicle battery plants under the national master labor agreement—a key union demand that GM has already agreed to in its negotiations.

The union argues that including battery plant workers is essential for a “just transition” to electric vehicles, as the shift from gasoline engines could eliminate thousands of well-paid union jobs, replacing them with lower-wage positions in battery manufacturing.

“We’ve achieved a breakthrough that will reshape negotiations and the future of our union and industry,” Fain said when announcing the GM agreement on this issue. However, Ford has yet to make a similar commitment.

These unresolved issues could lead some Ford workers to reject the deal, potentially sending thousands back to the picket lines.