UAW, Ford announce tentative agreement. What it includes

Wayne — Ford Motor Co. and the United Auto Workers said Wednesday night they have reached a "historic" tentative agreement to end a 41-day strike targeting selected plants at the Dearborn automaker.

The agreement includes 25% in base wage increases through April 2028 and will raise the top wage, now $32.32 an hour by over 30% to more than $40 an hour, and raise the starting wage by 68%, to over $28 an hour over the life of the contract, the UAW said in a news release announcing the deal. Workers will receive an immediate 11% wage increase upon ratification.

Also included are cost-of-living adjustments and a reduction in the time for new workers to reach the top wage scale from eight years to three years, the union said. The deal also includes improvements for current retirees, workers with pensions, and those who have 401(k) plans. It also includes a right to strike over plant closures, a first for the union.

"For months, we’ve said that record profits mean record contracts. And UAW family, our Stand Up Strike has delivered," UAW President Shawn Fain said in a video message delivered with union Vice President Chuck Browning, who heads the Ford department. "What started at three plants at midnight on September 15 has become a national movement. We won things nobody thought possible. Since the strike began, Ford put 50% more on the table than when we walked out.

"This agreement sets us on a new path to make things right at Ford, at the Big Three, and across the auto industry," he said. "Together, we are turning the tide for the working class in this country.”

Marick Masters, a labor expert and management professor at Wayne State University, said the information the union shared about the terms of the deal Wednesday points to the UAW making "significant progress toward achieving their goals." But a full assessment of the agreement will come after the details are revealed, including on items like union representation for joint-venture battery plant workers, which had been a thorny issue in the negotiations.

“On the surface at this point in time, it looks like they got substantially what they wanted on issues such as wages, tiers, in-progression and the right to strike, plus security for people who might be laid off," Masters said.

Ford will likely have to reduce costs in other parts of the business to account for higher labor costs, he said: "They've got their work cut out for them ... in order to offset this deal if they want to remain competitive.”

Daniel Ives, an analyst for wealth management firm Wedbush Securities Inc., reacted positively to the agreement.

“It’s a historic agreement that ends the UAW nightmare strike that’s been a black cloud for Farley and Ford for the last few months,” he said. “It also feels like the structure of the deal is not as onerous as investor originally feared. The worry was that a 35% to 40% pay increase was not a sustainable number. A 25% increase is something that is digestible and does not ruin the business model.”

It, however, does make the electric future Ford has outlined that much more of a challenge, he said: “It adds to the pressure around execution and its electric vehicle strategy in 2024. The margin of error is less, because of this deal.”

Browning said striking Ford workers would begin returning to work immediately pending ratification: “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 agreement brings the UAW's unprecedented simultaneous strike of all three Detroit automakers closer to a resolution.

"We are pleased to have reached a tentative agreement on a new labor contract with the UAW covering our U.S. operations," Ford CEO Jim Farley said in a statement. "Ford is proud to assemble the most vehicles in America and employ the most hourly autoworkers. We are focused on restarting Kentucky Truck Plant, Michigan Assembly Plant and Chicago Assembly Plant, calling 20,000 Ford employees back to work and shipping our full lineup to our customers again."

The targeted strike has sent more than 45,000 autoworkers from eight assembly plants and 38 parts distribution centers to picket lines. The UAW-Ford deal is the first between the union and any of the automakers and will likely speed resolutions at the bargaining tables with General Motors Co. and Stellantis NV.

“We are working constructively with the UAW to reach a tentative agreement as soon as possible," GM said in a statement Wednesday night.

The UAW's National Ford Council will come to Detroit on Sunday to vote on whether to send the agreement to members for a vote. If they do, there will be a Facebook Live presentation Sunday night to walk members through the details.

Outside the Michigan Assembly Plant, tents began being torn down, strike signs were piled up and smoke billowed from extinguished fire pits outside the Bronco plant as UAW members were directed by people who identified themselves as UAW representatives to go home because an agreement had been reached. They were directed to wait on a robocall.

"It's a big relief," said Jason Williams, 40, of Detroit, a three-year UAW member who works in the paint shop. "I've been ready to go back for a while. We've stood out here and fought for a long time. It's like waiting on a job. It's security."

As for the wage increase, Williams says he's "happy for whatever we can get."

That sounds "good" to Larry Greca, 57, of Milan, too, though "the devil's in the details."

The 26-year UAW member who works as a welding inspector said news of a TA was a relief, knowing he is going into surgery on Monday.

"No one wants to go out on strike," he said. "I was impressed with how they kept us informed and updated. It was never done like that. It was always done behind closed doors."

He added that he was touched by the support from local businesses and community members who donated items for children, fruits and vegetables, and other goods to support the strikers.

President Joe Biden praised the development in a statement Wednesday night: "I applaud the UAW and Ford for coming together after a hard-fought, good-faith negotiation and reaching a historic tentative agreement tonight. This tentative agreement provides a record raise to auto workers who have sacrificed so much to ensure our iconic Big Three companies can still lead the world in quality and innovation. Ultimately, the final word on this contract will be from the UAW members themselves in the days and weeks to come."

Michigan Gov. Gretchen Whitmer also hailed the agreement in a statement: “I want to congratulate the UAW and Ford for reaching an historic deal that benefits our world-class autoworkers and helps this world-class automaker succeed," she said. "This agreement will put more money into the pockets of hardworking Michiganders while ensuring the company can continue to grow and invest right here in Michigan.  

“There is a lot riding on these negotiations," she said. "We are in a fierce competition with the rest of the world for the future of manufacturing — and all eyes are on Michigan."  

Browning touted some of the agreement's highlights, saying it has "more value for our members in each individual year of this agreement than the entirety of the 2019 agreement" and will provide workers with more in general wage increases over the next four and a half years than what they received in the last 22 years combined.

"Thanks to the power of our members on the picket line and the threat of more strikes to come, we have won the most lucrative agreement per member since Walter Reuther was president," he said.

Temporary workers, he said, will see wage gains of over 150% over the length of the contract. And workers at Ford's Sterling Axle and Rawsonville components plants will be put on the same wage scale as production workers.

Still, Fain emphasized that the decision on whether to accept the agreement ultimately belongs to the rank-and-file members: “We send this contract to you because we know it breaks records. We know it will change lives. But what happens next is up to you all.”

The deal between the UAW and Ford follows a major escalation this week of the strike that experts and analysts said likely marked the union's last major push to get its demands met and demonstrate to rank-and-file members that it had done all it could to deliver on ambitious promises from leaders. After taking out Ford's largest and most profitable plant, Kentucky Truck Plant on Oct. 11, the union this week hit Stellantis' Sterling Heights Assembly Plant and GM's Arlington Assembly Plant in Texas, in moves aimed at hitting the automakers' bottom lines.

Details on the agreement that were previously provided by Ford and the union included conversion within 90 days of temporary workers to permanent status, product commitments for all UAW-represented plants in the U.S., ratification bonuses, and income protection for all permanent employees.

"UAW members made audacious demands, and their innovative strike strategy brought home a historic tentative agreement at Ford," Rebecca Kolins Givan, a labor expert at Rutgers University, said in a statement. "This contract sets a new standard. It demolishes the tiers that serve to divide workers and it provides wage increases that reflect record profits. These are huge gains that will stiffen the resolve of workers around the country. Stellantis and GM now know what they need to do to get their assembly lines moving again.”

The unanswered question remains whether the rank-and-file members are ready to adopt the deal.

“Some workers have now been on strike for 40 days,” said Marc Robinson, principal of consultancy MSR Strategy and a former GM internal consultant who was involved in labor negotiations. “That’s quite a lot of paychecks. Yes, they’ve gotten strike pay. It’s not the same. It’s an employment agreement. People eventually want to work. Each week, there’s sort of a trade-off between staying on strike another week or going back to work. It starts to look more favorable going back to work the longer they are out.”

jgrzelewski@detroitnews.com

bnoble@detroitnews.com