Ford and UAW reach tentative agreement with record pay increase

“Ford nears the end of the strike action as it strikes a deal with UAW”.

Ford has reportedly reached a tentative agreement with the United Auto Workers (UAW) union, signaling a potential end to the ongoing strike actions against the automaker. While the agreement is pending approval from union leaders and members, the outlook is promising.

UAW President Shawn Fain announced that the tentative deal includes a remarkable 25% wage increase over a four-and-a-half-year contract, starting with an immediate 11% raise. Temporary workers at the lower end of the pay scale are expected to benefit significantly, with increases of over 150% during the same period.

In addition to the pay increases, Ford has agreed to grant the UAW the right to strike again when the company decides to close plants in the future.

Ford CEO Jim Farley expressed a focus on restarting various plants, including the Kentucky Truck Plant, Michigan Assembly Plant, and Chicago Assembly Plant, aiming to bring back around 20,000 Ford employees and resume production to meet customer demand.

The UAW’s dealings with Ford are being closely watched by other Detroit automakers, as the union is likely to seek similar agreements from General Motors and Stellantis. Both GM and Stellantis have been impacted by the ongoing strike, with work stoppages affecting several of their facilities. They have also indicated that they are working on tentative deals with the UAW.

The strike’s economic losses have been estimated to exceed $9.3 billion, and the full impact on the automotive industry is expected to become more apparent in early 2024. In response to increased labor costs, it’s anticipated that the “Big Three” automakers will adjust pricing for current and future models. As a result, consumers may not see lower-priced electric vehicles like a $30,000 Equinox EV or a $40,000 F-150 Lightning in the near future.