Ford and the United Auto Workers are close to reaching an agreement on a new contract, which could potentially end the union’s widening strike against the Detroit Three automakers, according to multiple reports.
The two sides had productive talks late Tuesday and appear close to a tentative agreement on a union contract for 2023, sources told the newspaper. Detroit Free Press on Wednesday.
On September 15, the UAW launched escalating strikes against Ford, General Motors and Stellantis. An agreement with one company could provide a template for deals with the others.
In talks late Tuesday night, the union made Ford a counteroffer that proposes a 25 percent across-the-board pay increase over the life of a new four-year contract, two people familiar with the talks told the Associated Press.
Previously, Ford, Stellantis and General Motors had all offered a 23 percent pay increase.
Striking United Auto Workers (UAW) members picket the General Motors Lansing Delta Plant in Delta Township, Michigan in a file photo
United Auto Workers President Shawn Fain (left) and Ford CEO Jim Farley are seen in file photos. Reports indicate that Ford and UAW are nearing an agreement to end the strike
A Ford deal would include cost-of-living raises that could push the total pay increase above 30 percent, said the officials, who spoke on condition of anonymity. Additionally, employees would still receive annual profit sharing checks.
Representatives for Ford and UAW did not immediately respond to requests for comment from DailyMail.com on Wednesday afternoon.
Late Tuesday, Benjamin Dictor, a labor attorney with the UAW, cryptically tweeted a photo of Ford World Headquarters in Dearborn, Michigan, with the caption: “A beautiful evening in Dearborn.”
It is still possible that despite the significant progress being made, the negotiations will fall apart.
But if the UAW can reach a tentative agreement with Ford, it could be used as a model to seek similar contract deals with GM and Stellantis.
During previous auto strikes, a UAW deal with one automaker has led the other companies to compare the agreement to their own settlements.
One of the officials told AP that progress had also been made in the union’s talks with GM. But it was unclear whether any of the automakers had accepted the UAW’s counteroffer of a 25 percent pay increase over four years.
The progress in negotiations came after the union this week walked into three factories that produce highly profitable pickup trucks and SUVs, adding them to the list of factories already on strike in a strategy to increase pressure on the companies.
Currently, 46,000 UAW workers are on strike at Detroit Three plants across the country, accounting for about 32 percent of the 146,000 union members at the three companies.
Fain addresses the crowd at a rally in support of striking UAW members in Detroit last month
The UAW’s targeted attack strategy has hit multiple U.S. factories and cut off billions in revenue for the Detroit Three automakers.
It has also broken out, causing some auto parts manufacturers and assembly plants not covered by a strike to start feeling the heat.
On Tuesday, about 5,000 workers at GM’s Arlington, Texas, assembly plant walked out, halting production of truck-based SUVs that generate huge profits for the company.
A day earlier, UAW President Shawn Fain added 6,800 workers to Stellantis’ Ram pickup plant in Sterling Heights, Michigan.
Two weeks ago, the union hit Ford’s largest and most profitable plant, the Kentucky Truck Plant in Louisville, where 8,700 workers make heavy-duty F-Series pickups and two full-size SUVs.
In total, about 46,000 workers fled the three companies’ factories in a series of targeted strikes that began on September 15. About 32% of the 146,000 automaker union members are now on strike and living on $500. per week strike pay. The automakers have laid off workers at other plants as parts shortages have rippled through their production systems.
Todd Dunn, president of the local UAW chapter at Ford’s Kentucky Truck Plant, said people within the union’s leadership told him the company is nearing an agreement.
“I’ve heard they’re moving the needle as aggressively as possible,” Dunn said in an interview Wednesday. ‘It’s very positive.’
The prospect of a breakthrough, he said, has lifted the spirits of workers willing to continue striking to reach a deal despite the hardships for some.
Dunn said he thinks the strike at his plant has given Ford a boost in talks and could help it win the best contract he has seen in 29 years with the company.
Neither the companies nor the union would comment on the talks on Wednesday. The union’s counteroffer of a 25 percent pay increase over four years was previously reported by Bloomberg News and the trade magazine Automotive News.
Marick Masters, a business professor at Wayne State University in Detroit who studies labor issues, said it was not surprising that the union would be close to an agreement at this point in the talks.
“I think Shawn Fain attacked these plants at this particular time last week because he thought they were close to a deal and that this would be the extra push to get something more solid,” Masters said. “If you look at the movement and the concessions, they are getting smaller, but they are getting closer to what the union wanted.”
When contract talks began in July, the union demanded a 40 percent pay increase over four years, as well as a cost-of-living recovery. The union had abandoned cost-of-living increases in 2009 to help businesses survive the aftermath of the Great Recession.
The UAW also wants traditional defined-benefit pension plans restored for workers hired after 2007, an end to differential pay levels for UAW workers, increased pensions for retirees and other benefits.
A key issue is whether to expand the national UAW contract to eleven U.S. electric vehicle battery factories. This would essentially ensure that workers there would be represented by the union.
All but one of these factories are joint ventures with South Korean battery manufacturers. GM has agreed to this, but the other companies have resisted, saying their joint venture partners should also agree.
UAW union members picket outside the Ford truck plant in Kentucky after a strike in Louisville on October 12
During past auto strikes, a UAW deal with one automaker has typically resulted in the other companies comparing that agreement to their own settlements
GM CEO Mary Barra said Tuesday that the offer to include the battery plants in the master union agreement was still open, but that they would have to meet what she called “benchmark economics and also operational flexibility.”
Having union representation at the battery plants is a critical issue for the union because these plants will house many of the jobs of the future as the industry moves away from gasoline vehicles.
Workers who now make engines and transmissions at all three companies will need places to work as their factories are phased out.
The progress in contract talks follows statements from Ford executives over the past two weeks that their offers, which exceeded those of their competitors, are reaching the limit of how much the company is willing to pay to settle the strikes.
All three companies have said they do not want to absorb labor costs so high that they would force price increases and make their vehicles more expensive than those of non-union companies like Tesla and Toyota.
A survey from Moody’s Investor Service this month found that annual labor costs could rise by $1.1 billion for Stellantis, $1.2 billion for GM and $1.4 billion for Ford in the fourth year of the contract. The study assumed a 20 percent increase in hourly labor costs.
Wayne State’s Masters said the companies will have to cut other expenses or increase vehicle prices to cover the cost of a new contract. However, prices will be limited by a competitive car market, he said.
GM said Tuesday it is already preparing for additional labor costs, saving $2 billion in fixed costs by the end of 2024. The company is also looking at other ways to save.
The company said it lost $200 million in pretax profits as a result of the strike in the third quarter, and has lost another $600 million so far in the fourth quarter. After that, it could lose as much as $200 million a week, not including the closure of the Texas plant or any further strikes.