UAW and Ford reach tentative contract agreement

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

The union said the agreement includes a roughly 25 percent wage increase over four years and significant gains on pensions and job security, as well as the right to strike over factory closures. It called on striking Ford workers to return to work while the initial agreement awaits ratification.

The agreement will be presented to the UAW Council, which oversees relations with Ford, at a meeting Sunday, union president Sean Fine said in a Facebook Live broadcast. If the board approves, the union will present the terms of the contract to the company’s 57,000 unionized workers for their ruling.

“We made history,” Mr. Fine said.

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

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

Two weeks ago — when it said it had reached the limit of what it could afford without hurting its business — Ford offered a 23 percent pay rise, adjusting wages in response to inflation, and cutting the time needed for new hires to move up to the highest wage. To four years from eight. Other companies made similar offers.

But the UAW pushed for greater concessions, intensified strikes and targeted factories that produce some of the automakers’ most profitable models.

In all, about 45,000 workers at Ford, GM 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 about 10,000 more at Ford plants in Illinois and Michigan.

The tentative agreement with Ford may increase pressure on other companies to reach an agreement with the union. In the past, once the consortium reached an agreement with one automaker, preliminary agreements with other companies quickly followed. But that history may not be relevant now because the UAW did not strike all three companies simultaneously until this year.

Companies are investing billions in switching to battery-powered cars, which they say makes it difficult for them to pay much higher wages. Last week, Ford CEO William C. Ford Jr., the union’s demands risk hurting the ability of Detroit automakers to compete against non-union companies like Tesla and foreign rivals.

“Toyota, Honda, Tesla and others love the strike, because they know the longer it lasts, the better it is for them,” he said. “They will win, and we will all lose.”

The UAW presents a different case: Success in its contract battle with the Big Three would give it momentum to organize auto workers at other companies as well.

Their strikes began when the companies’ union contracts expired in mid-September. She received immediate support from President Biden, who called on automakers to “ensure record corporate profits mean record contracts” and briefly joined workers on a picket line at a General Motors plant near Detroit late last month.

The union initially demanded a 40 percent pay increase over four years, an amount that union officials said matched the raises received by top executives at the three companies over the past four years. The raises are also intended to make up for more modest raises auto workers have received in recent years and concessions the union offered companies starting in 2007.

In addition, the union called for an end to the system that pays new employees just over half the top wage of $32 an hour. It sought cost-of-living adjustments that would push wages higher to compensate for inflation. It wants to restore pensions to all workers, improve retiree benefits and reduce working hours.

GM and Stellantis faced the latest escalation in UAW strikes when the union called out 6,800 workers at a large Ram pickup truck plant in Michigan on Monday and 5,000 workers at GM’s plant in Arlington, Texas, which makes large sport utility vehicles including the Chevrolet Tahoe, GMC Yukon and Cadillac. Escalade.

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

On Tuesday, GM reported third-quarter earnings of $3.1 billion, down 7 percent from the same period last year, partly due to the ongoing strike. Ford is scheduled to report its third-quarter earnings on Thursday.