Leadership for the United Auto Workers union announced it had reached a "tentative" contract agreement with Ford Motor Co. Wednesday evening.
"Today, we reached a tentative agreement with Ford," UAW President Shawn Fain said in a video posted on X. "For months, we said that record profits mean record contracts. And UAW family, our stand-up strike has delivered."
The agreement is a breakthrough toward ending the nearly 6-week-old strikes against Detroit automakers.
Terms of the deal weren’t immediately available, but both sides have been discussing a four-year contract. It would have to be approved by 57,000 union members at Ford.
The Ford deal could set the pattern for agreements with the other two automakers.
Sources familiar with the talks told The Associated Press the union made a counter-offer to Ford that proposes a 25% general wage increase over the life of a new contract and said that negotiations on Tuesday extended well into Wednesday. Previously Ford, Stellantis and General Motors had all offered 23% pay increases.
A Ford deal would include cost-of-living pay increases that could lift the total pay raises above 30%, said the people. In addition, workers would still receive annual profit-sharing checks.
Typically, during past auto strikes, a UAW deal with one automaker has led the other companies to match it with their own settlements.
One of the people said there also was progress in the union’s talks with GM. But it was unclear whether any of the automakers had accepted the UAW’s counter-offer of 25% pay increases over four years.
The progress in the negotiations came after the union this week walked out at three factories that produce highly profitable pickup trucks and SUVs, adding them to the list of plants already on strike in a strategy to intensify pressure on the companies.
On Tuesday, about 5,000 workers at GM’s assembly plant in Arlington, Texas, walked out, halting production of truck-based SUVs that are huge profit makers for the company. A day earlier, the UAW’s president, Shawn Fain, had added 6,800 employees at Stellantis’ Ram pickup plant in Sterling Heights, Michigan.
Two weeks ago the union struck Ford’s largest and most profitable factory, the Kentucky Truck Plant in Louisville, where 8,700 workers make heavy-duty F-Series pickups and two large SUVs.
In all, about 46,000 workers have walked out at factories owned by the three companies in a series of targeted strikes that began Sept. 15. About 32% of the union’s 146,000 members at the automakers are now on strike and getting by on $500 per week in strike pay. The automakers have been laying off workers at other plants as parts shortages have cascaded through their manufacturing systems.
SEE MORE: 5,000 GM workers in Texas join strike, union says
The union’s counter-offer of a 25% wage increase over four years was reported earlier by Bloomberg News and the trade publication Automotive News.
One key issue is whether to extend the national UAW contract to 11 U.S. electric vehicle battery factories. This would essentially ensure that workers there would be represented by the union.
All but one of these plants are joint ventures with South Korean battery makers. GM has agreed to this, but the other companies have balked, saying their joint venture partners must also agree.
GM CEO Mary Barra said Tuesday that the offer to bring the battery plants into the master union agreement was still open but that they would have to meet what she called “benchmark economics and also operating flexibility.”
Having union representation at the battery factories is a vital issue for the union because these plants will house many of the jobs of the future as the industry transitions away from gasoline vehicles. Workers who now make engines and transmissions at all three companies will need places to work as their plants are phased out.
All three companies have said they don’t want to absorb labor costs that are so high that they would force price increases and make their vehicles more expensive than those made by nonunion companies such as Tesla and Toyota.
A study this month by Moody's Investor Service 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% increase in hourly labor costs.
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