Tuesday, June 25, 2024

The United Automobile Workers and Ford Motor have reached a tentative agreement on a new four-year labor contract, the union announced Wednesday, nearly six weeks after the union began a growing wave of walkouts against the three Detroit automakers.

The union said the deal included a roughly 25 percent pay increase over four years, cost-of-living wage adjustments, major gains on pensions and job security, and the right to strike over plant closures. It called on striking Ford workers to go back to work while the tentative agreement awaits ratification.

Shawn Fain, the union president, said in a livestream on Facebook that the accord would be submitted to the U.A.W. council that oversees relations with Ford at a meeting in Detroit on Sunday. If the council approves, the union will submit the contract terms to the company’s 57,000 union workers for their verdict.

“We made history,” Mr. Fain said. “We told Ford to pony up, and they did.” He said the terms included an immediate 11 percent wage increase upon ratification.

Ford issued a brief statement that said in part, “We are pleased to have reached a tentative agreement on a new labor contract with the U.A.W. covering our U.S. operations.”

The union continues to negotiate with General Motors and Stellantis, whose brands include Chrysler, Jeep and Ram.

“We know it breaks records,” Mr. Fain said of the tentative agreement with Ford. “We know it will change lives.” But he underlined that it was up to union members to deliver the ultimate verdict.

Two weeks ago — when it said it had reached the limit of what it could afford without hurting its business — Ford offered to increase wages 23 percent, adjust pay in response to inflation and cut the time for new hires to rise to the top wage, to four years from eight. The other companies have made similar offers.

But the U.A.W. pressed for greater concessions, ratcheting up the walkouts and aiming them at factories producing some of the automakers’ most profitable models.

“This is a major victory for the union after years of erosion by inflation, division by wage tiers and other real issues in the workplace that made people angry,” said Harley Shaiken, a professor emeritus at the University of California, Berkeley, who has followed the U.A.W. for more than three decades. “It sets a standard for other workers throughout the economy.”

President Biden, who had championed the union’s cause and joined a picket line on a visit to Michigan last month, hailed the accord. “I applaud the U.A.W. and Ford for coming together after a hard-fought, good-faith negotiation and reaching a historic tentative agreement,” he said.

The union said the agreement would ultimately lift the top wage to more than $40 an hour, giving a member working 40 hours a week a base pay of more than $83,000, not including overtime and profit-sharing bonuses, which were more than $14,000 in 2022.

The current top wage is $32 an hour, or about $67,000 a year based on a 40-hour week.

Recent hires who make considerably less than the top wage will see their pay nearly double over the life of the contract, the union said.

The tentative deal with Ford could increase pressure on the other companies to reach an agreement with the union. In the past, once the union reached a deal with one automaker, tentative agreements with the others quickly followed. But that history may not be as relevant now because the U.A.W. had never struck all three companies simultaneously until this year.

Altogether, about 45,000 workers at Ford, G.M. and Stellantis are on strike across the country, including 8,700 workers at Ford’s Kentucky truck plant in Louisville, the company’s largest, and almost 10,000 others at Ford factories in Illinois and Michigan.

The companies are investing billions in a transition to battery-powered vehicles, a financial commitment that they say makes it harder for them to pay substantially higher wages. Last week, Ford’s executive chairman, William C. Ford Jr., said the union’s demands risked damaging the ability of Detroit automakers to compete against nonunion companies like Tesla and foreign rivals.

“Toyota, Honda, Tesla and the others are loving the strike, because they know the longer it goes on, the better it is for them,” he said. “They will win, and all of us will lose.”

The U.A.W. makes a different case: that success in its contract battle with the Big Three will give it momentum to organize autoworkers at other companies as well.

It began its walkouts when the companies’ union contracts expired in mid-September. It won immediate support from Mr. Biden, who called on the automakers to “ensure record corporate profits mean record contracts” and briefly joined workers on a picket line at a G.M. plant near Detroit late last month.

The union initially demanded a 40 percent wage increase over four years — an amount that union officials have said matches the raises the top executives at the three companies have received over the last four years. Those raises are also meant to compensate for more modest increases the autoworkers received in recent years and concessions the union made to the companies beginning in 2007.

In addition, the union called for an end to a system that pays new hires just over half of the top wage of $32 an hour. It demanded adjustments that would nudge wages higher to compensate for inflation. And it wanted a reinstatement of pensions for all workers, improved retiree benefits and shorter work hours.

G.M. and Stellantis faced the most recent escalation of the U.A.W. walkouts when the union called out 6,800 workers at a large Ram pickup truck plant in Michigan on Monday and 5,000 workers at a G.M. plant in Arlington, Texas. That factory makes large sport utility vehicles including the Chevrolet Tahoe, the GMC Yukon and the Cadillac Escalade.

“Ford knew what was coming for them on Wednesday if we didn’t get a deal,” Mr. Fain said. “That was checkmate.”

On Tuesday, G.M. reported a third-quarter profit of $3.1 billion, a 7 percent decline from a year earlier, owing in part to the strike. Ford is scheduled to announce its third-quarter earnings on Thursday.

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