DETROIT– The United Auto Workers union has overwhelmingly endorsed new contracts with Ford and Stellantis, which along with a similar deal with General Motors, will raise wages across the industry, force automakers to absorb higher costs and disrupt the auto industry help reform as it moves away from gasoline-powered vehicles. vehicles.
Employees at Stellantis, the maker of Jeep, Dodge and Ram vehicles, voted 68.8% in favor of the deal. Their approval ended a contentious labor dispute that included name-calling and a series of punitive strikes that imposed high costs on companies and led to significant wage increases and benefits for UAW workers.
The Stellantis deal passed by a margin of about 10,000 votes, with vote counting ending Saturday afternoon.
Ford workers voted 69.3% in favor of the pact, which passed by a margin of nearly 15,000 votes in voting that ended early Saturday. Earlier this week, GM workers narrowly approved a similar contract.
The agreements, which run until April 2028, will end contentious talks that began last summer and led to six-week strikes at all three automakers. Shawn Fain, the combative new UAW leader, had branded the companies as enemies of the UAW, led by overpaid CEOs, and declared that the days of union cooperation with the automakers were over.
After negotiations failed to reach an agreement for an entire summer, Fain began strikes at one assembly plant of each company on September 15. The union later expanded the strike to parts warehouses and other factories in an effort to increase pressure on automakers until tentative agreements were reached in late October.
The new contract agreements were widely seen as a victory for the UAW. The companies agreed to dramatically increase wages for top workers at assembly plants, with increases and cost-of-living adjustments that would translate into a 33% wage increase. The top workers at the assembly plant will receive an immediate 11% pay increase and will earn about $42 per hour when the contracts expire in April 2028.
Under the agreements, the automakers also ended many of the different wage levels they had used to pay different workers. They also agreed in principle to include new battery factories for electric vehicles in the national union contract. This provision will give the UAW an opportunity to unionize EV battery factories, which will represent a rising share of industry jobs in the coming years.
“I think this is a huge victory for the UAW that they ratified all three contracts,” said Art Wheaton, director of labor studies at Cornell University. “It lifts the boats of all or many autoworkers.”
Three foreign automakers that are not unionized in the United States – Honda, Toyota and Hyundai – quickly responded to the UAW contract by raising wages for their factory workers. They did this after Fain said the UAW would make an aggressive effort to unify their factories. He also said the union would try to recruit workers from Tesla.
Foreign automakers have argued in the past that their workers earn about the same as members of the UAW, negating the need for a union. They have also accused the UAW of forcing GM and the former Chrysler into bankruptcy in 2009 and of committing corruption after federal prosecutors broke up a massive 2017 bribery and embezzlement scandal.
But with Fain’s election and the new contracts, the union has “healed or adjusted all that rhetoric,” Wheaton said.
While wages in non-union plants can be nearly the same, he says, UAW workers get much better health care and retirement benefits, which will likely be attractive to workers in non-union plants as they get older.
Contracts with the auto companies should also lead to higher wages at auto parts suppliers and in other industries, Wheaton said.
“The union has gained a lot more power” because of the deals, said Mark McGill, a 67-year-old worker at the Ford assembly plant in Wayne, Michigan, where workers have been on strike for six weeks. “Now look at everyone. People want to unite.”
McGill, a 28-year Ford veteran who helps assemble Ford Bronco SUVs and Ranger pickups, said he is pleased he will be making $42 an hour by the end of the contract. He is also pleased that Fain negotiators were able to convince Ford to pay workers about $100 a day for the time they were on strike.
But under the settlement, new hires and temporary workers will receive a much larger pay increase than longtime workers at the assembly plant, with some even more than doubling their wages. That issue almost sank the contract with GM. Wheaton noted that raising wages for the lowest-paid workers has been a focus of the union movement in the U.S. over the past year.
All three automakers reported millions in lost revenue due to the strikes and said they would absorb at least some of the higher costs of wage increases in a competitive market that makes raising prices difficult. John Lawler, Ford’s chief financial officer, said the deal would increase labor costs by $850 to $900 per vehicle. All three companies said they had already cut other costs in preparation for the UAW settlements.
Michelle Krebs, an analyst at Cox Automotive, said a slowing U.S. auto market and already high prices that have made new cars unaffordable for many people will make it difficult for companies to charge more.
Cox forecasters predict flat auto sales in the U.S. next year. Declining demand but rising factory production will likely bring more discounts, Krebs said. Furthermore, auto loan rates average around 10%, a rate that will further slow car sales by increasing monthly payments.
The union’s success in securing significant wage increases could provide a political boost to President Joe Biden, who visited workers on a picket line in the Detroit area and traveled to Belvidere, Illinois, Cornell’s Wheaton said. There, the union got a commitment from Stellantis to reopen a shuttered factory and even add an EV battery factory.
Biden, the first president in our history to visit a union picket line, has portrayed himself as a champion of the working class who himself came from a blue-collar background in Scranton, Pennsylvania. The strikes, Wheaton noted, did not hurt the economy but did result in higher wages for middle-class workers whose votes Biden needs as he seeks a second term.