Not since Detroit’s golden years in the 1950s – and perhaps not ever – has the United Auto Workers won so much in a single contract as the agreement with Ford that UAW President Shawn Fain (left above) and UAW Ford Vice President Chuck Browning outlined Wednesday evening.
If adopted and ratified at Ford, General Motors and Stellantis, the deal will boost pay for full-time Detroit Three factory workers by 33% over the next 4 ½ years. COLA, or cost of living allowances, lost over 15 years of concessionary contracts are restored.
Pay for temporary workers will rise by 150%, starting with an immediate 85% raise. The Companies will substantially increase contributions to retirement plans. Wage “tiers” that resulted in certain UAW workers earning less than union colleagues in the same building were largely eliminated.
GM and Stellantis were still bargaining Friday morning. Reuters reported that GM was in “intensive talks” that lasted until 5 AM Friday. All signs point to them adopting the same economic framework as Ford.
At Stellantis, a significant unresolved issue remains the future of the Belvidere, Ill. Jeep plant the company shut down earlier this year. Fain has vowed to save it – or the jobs lost.
The UAW contract drama isn’t done. Suppliers such as Dana are still reckoning the damage from the walkouts.
Fain still needs to win ratification votes at the three automakers – a process that used to be as routine as a football extra point kick but is no longer. Ask UAW leaders at Mack Truck, where negotiations are stalled after union rank-and-file members voted down a proposed contract.
Still, Fain’s unorthodox tactics – carrying out an escalating campaign of targeted walkouts at all three automakers, trash-talking CEOs on social media and transforming UAW bargaining into a nationwide campaign to reverse income inequality – appear to have delivered a result far beyond expectations of company executives.
For Detroit, and maybe beyond, Shawn Fain and UAW strikers have put an end to an era in which production workers’ wages were stagnant relative to inflation, productivity gains and most obviously, CEO pay.
Now what?
The UAW finally has a contract it can use in new efforts to organize Tesla and other non-union automakers – efforts that are more vital because of how the new contract will hike labor costs at the Detroit Three. Non-union auto workers should benefit in any case as their employers raise pay to fend off UAW organizers.
GM, Ford and Stellantis executives now must re-calibrate strategies that called for shifting billions in future product investment to electric vehicles – absorbing near-term losses in hopes of winning over Wall Street investors who made Tesla the world’s most valuable automaker.
As we’ll see below, those plans are going up on lifts for some major repairs.
