The United Auto Workers (UAW) union and Ford Motor Co (NYSE: F) have officially put an end to the nearly six-week strike that has gripped the automaker, as revealed by the union on Wednesday night.
In a groundbreaking development, a tentative agreement has been reached, encompassing a substantial 25% pay increase over the agreement’s term. This increase translates into a cumulative top wage exceeding $40 per hour. Particularly, it also incudes a 68% boost in starting wages, now surging past $28 an hour.
Furthermore, the agreement ensures the reinstatement of cost-of-living adjustments and establishes a clear three-year path to reach the coveted top wages. Notably, it also secures the right to strike when it comes to plant closures, among several other notable enhancements to worker benefits.
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UAW President Shawn Fain conveyed his satisfaction, stating, “We told Ford to pony up, and they did. We won things nobody thought were possible.” Fain underlined that Ford’s offer had surged in value by 50% from the outset of the targeted “stand-up” strikes that began on September 15.
Before this pivotal agreement can be cemented, it must undergo approval from local UAW leaders, followed by ratification through a simple majority vote by Ford’s 57,000 union-represented workers. The union will organize informational meetings, including an online briefing to discuss the specific terms of the agreement, which will be made available online along with summaries.
Workers currently on strike with Ford will soon return to work, while the approval and voting process takes its course, as UAW Vice President Chuck Browning indicated during the video alongside Fain. Browning emphasized the strategic aspect of this move, saying, “Like everything we’ve done during this ‘stand-up’ strike, this is a strategic move to get the best deal possible. 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.”
In response to this development, Ford expressed its contentment with the tentative agreement and is now focused on reinitiating production at key facilities such as the Kentucky Truck Plant, the Michigan Assembly Plant, and the Chicago Assembly Plant, which had seen walkouts by approximately 16,600 workers.
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Following this news, Ford’s stock experienced a notable uptick of around 2% during after-hours trading. The stock had closed at $11.54 per share on Wednesday, marking a 1.3% increase, with year-to-date shares declining by less than 1%.
The UAW disclosed that the gains secured in this deal outshine the gains of the 2019 contract by more than fourfold and deliver higher base wage increases than Ford workers have witnessed in the past 22 years.
The intense bargaining that culminated in this historic deal took place on Tuesday and Wednesday, with sources indicating the sheer magnitude of effort invested by both the UAW and Ford. This remarkable development follows a period of intense negotiations primarily focused on economic aspects, after both sides failed to reach new contracts covering 146,000 autoworkers by the September 14 deadline.
It is important to note that this year’s negotiations were unique in that the UAW opted to engage all three major automakers, including General Motors and Stellantis, simultaneously. This marked a departure from previous approaches, where UAW leaders would negotiate individually with each automaker, selecting a lead company to serve as the foundation for subsequent agreements.
Both General Motors and Stellantis released statements on Wednesday night, affirming their ongoing commitment to working with the UAW union to reach tentative agreements “as soon as possible.”
Information for this briefing was found via CNBC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
