United Auto Workers Union Hails Strike-Ending Deals with Automakers That Would Raise Top Assembly-Plant Hourly Pay to More Than $40 as ‘Record Contracts’

Yves here. The fact that the crisis in the Middle East, the soon-to-start-in-a-big-way US budget fight, Trump and other hop topics have been eating the news means the normally-big story of the tentative settlement of the auto union workers’ strikes hasn’t gotten much attention. This post gives a streamlined recap.

The twitterverse confirms that these deals are genuine serious wins:

By Marick Masters, Professor of Business and Adjunct Professor of Political Science, Wayne State University. Originally published at The Conversation

The United Auto Workers union agreed on a tentative new contract with General Motors on Oct. 30, 2023, days after landing similar deals with Ford Motor Co. on Oct. 25 and Stellantis, the global automaker that makes Chrysler, Dodge and Ram vehicles in North America, on Oct. 28. The pending agreements have halted the industry’s longest strike in 25 years. It began on Sept. 15, when the UAW’s prior contracts with all three automakers expired, and lasted more than six weeks. After gradually ramping up, the strike eventually included about 46,000 workers – roughly one-third of the union’s 146,000 members at the three companies.

Ford released a statement in which it said it was “pleased” to have reached a deal and “focused on restarting Kentucky Truck Plant, Michigan Assembly Plant and Chicago Assembly Plant.” Stellantis, likewise, looks forward to “resuming operations,” as one of its executives said in a statement. General Motors initially made no public statements.

The Conversation asked Marick Masters, a Wayne State University scholar of labor and business issues, to explain what’s in these contracts and their significance.

What Are the Terms of the Contract?

According to several media reports and the union’s own announcements, Ford’s tentative labor agreement includes a 25% wage increase over the next 4½ years, as well as the restoration of a cost-of-living allowance the UAW lost in 2009.

In addition, the tentative agreements also will convert many temporary workers to full-time status, higher pay for temps, the right to go on strike over plant closures and significant increases in contributions to retirement plans.

By the end of the period covered by the Ford, GM and Stellantis contracts, the top worker wage at assembly plants will be more than US$40 an hour. All three contracts will expire on April 30, 2028.

The Stellantis deal, according to UAW officials, is similar to the one reached with Ford in other ways – as, reportedly, is the one that the UAW agreed upon with GM.

The Stellantis agreement also has provisions regarding specific North American plants, including the plant Stellantis had idled earlier in 2023 in Belvidere, Illinois, the UAW said. Stellantis has promised to add 5,000 new jobs at Belvidere and other factories over the next four years, in stark contrast to its previous intention to cut that many jobs during the same period, UAW President Shawn Fain said on Oct. 28.

The Ford contract, likewise, calls for more than $8 billion in investments in factories and other facilities, according to the UAW.

Why Did Workers Feel the Strike Was Necessary, and Did They Achieve Their Aims?

The workers knew that the companies had enjoyed big profits over the past several years. GM, for example, earned $10 billion in profits in 2021 and $14.5 billion in 2022.

After having made major economic concessions to help the companies survive the Great Recession, stiff international competition and the 2009 bankruptcies of GM and Chrysler – before the latter became a division of Stellantis – UAW members believed they deserved what they’re calling a “record contract” for having contributed to “record profits.”

“The days of low-wage, unstable jobs at the Big Three are coming to an end,” Fain said on Oct. 28. “The days of the Big Three walking away from the American working class, destroying our communities, are coming to an end.”

To forge its militant strategy, the union tore a page from the playbook of labor leader Walter Reuther, who led the UAW from 1946 until his death in 1970. Reuther believed that workers deserved a fair share of corporate abundance – just like shareholders and customers.

What Happens Next?

The UAW released the full details of the Ford contract to all of its members who are Ford workers on Oct. 29, after its leaders had signed off on it. Rank-and-file members now have to ratify the deal for it to go into effect.

The same process will happen with Stellantis on Nov. 2. The separate deal the UAW negotiated with GM will also require ratification.

In the meantime, the autoworkers who went on strike will be returning to their jobs.

How Will This Affect the Automakers’ Bottom Line?

Some analysts have estimated that Ford’s contract, if ratified, would add $1.5 billion to the company’s annual labor costs. Ford itself estimated that this could add up to $900 in labor costs to each vehicle rolling off its assembly lines. Ford has also estimated that the strike cost it about $1.3 billion in pretax profits.

To put these numbers into perspective, Ford generated slightly more than $130 billion in revenue in the first three quarters of 2023, and almost $5 billion in profits.

Stellantis has not yet made public what it believes the strike has cost the company.

General Motors has said that the strike is costing the company more than $800 million.

This article was updated on Oct. 30, after GM and the UAW reached a tentative agreement on a new labor contract.

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    1. Irrational

      Just my thought that the UAW had more leverage because everyone is rushing out of moribund Europe! Good for the UAW guys, though.

  1. griffen

    I must give some approval, even if I disagree on the politics of a strike, on what UAW leader Fain accomplished. He was playing hardball and now they have won. If the CEO of GM or the CEO of Ford is worth “every shiny nickel” they earn then I had a hard time finding disagreement that the line and assembly workers didn’t deserve the same. I find it a frequently disgusting angle on how CEOs or CFOs, as a presumed leader of any corporation and especially any Fortune 500 company, see salary and benefits only ever going up. Perfectly fine in good times, not so much in the bad or lean times. And far too often in lean times, you’ll see the leaders of these above companies vent and moan as they “have to cut” positions….crocodile tears notwithstanding. Throw a pizza party to say goodbye!

    Corporate America circa 2023. Enjoy the dog food, you are mere associates since we can’t actually use the verbiage we want to use.

  2. Alice X

    I really do appreciate that Shawn Fain seems to understand class consciousness in describing the workers as working class. It is a class struggle, and it will be for them to decide with their vote that they have won this round. If they have gotten rid of the two-tier system that would be a huge win to me, it was pure divide and conquer.

  3. Socal Rhino

    As I understand it, UAW’s strategy of targeted strikes was adopted from successful strikes by the flight attendants union.

    Will be interesting to watch UAW organizing efforts with non-union auto manufacturers (Tesla, foreign brands).

    1. Henry Moon Pie

      “why didn’t the union, mandate, that any increases that they achieve, be taken FROM the management?”

      Part of the answer lies in the labor movement’s choice decades ago to limit bargaining to wages and benefits, eschewing bargaining over other aspects of the firm’s practices and policies. The attitude has been, “Let the company run its business as long as we get paid.”

      Staughton Lynd has argued that this was a huge mistake along with American labor’s readiness to give up the right to strike during the duration of a contract. Solidarity unionism, drawn on the IWW’s approach to relations with management, takes a broader view of what a union should be bargaining about.

      A recent example of solidarity unionism can be found in the Chicago Teachers’ Union’s advocacy for building upgrades, Covid protections and community politicies. CTU has a number of “dual card” holders, i.e. teachers who are member of both CTU and the IWW, who are key to this broader approach.

  4. arihalli

    1) always glad to see dollars trickle down to the working class

    2) yet, who is paying for these salary increases?

    3) why didn’t the union, mandate, that any increases that they achieve, be taken FROM the management?

    4) if what i am reading is correct, then the new vehicles price, will increase ($900?), and the labor class around the country will have to pay for it, not management. Not trying to be snarky at all, but i don’t find this a net plus, rather disheartening.

    1. Alice X

      It would take a change in the system (which I am all for) to reign in the greed of the owners. They would never agree (in some contract) to actually take from their own hoarding of wealth to pay for any gains to their workers. Neither would they agree to a change in the system. So who you gonna call? (Hint, a revolutionary?)

    2. responseTwo

      When Ford says there’s an extra $900 in labor costs for each car, it’s probably only $500 and they will charge an extra $900 per car.

    3. TimH

      if what i am reading is correct, then the new vehicles price, will increase ($900?)

      Cost and price are only loosely related. Selling price is whatever is can be.

    4. Paul Art

      I think there is still some healthy competition between the companies? That should take care of the price increases being passed down to consumers?

    5. Kurtismayfield

      yet, who is paying for these salary increases?

      Who is paying for the insane car price increases of the past few years? Where did all that money go?

      I’d rather the workers get some of it than none

    6. Carla

      @arihalli — I like your idea that the $900 management claims will be added to the price of a car should be taken FROM management. Just keep in mind, when managers get raises, better benefits, stock options, and longer paid vacations, that is NEVER publicized by them in terms of how much those costs will add to the price of a car. In fact, it is never publicized at all. The terms of the UAW contract are public. Any management claims about the ramifications are just propaganda to make working people fighting for a fair wage look bad.

      What Shawn Fain and the UAW have pulled off is inspiring!

  5. Mark Gisleson

    Made me do the inflation math. When Firestone hired me in 1973 to pour bags of carbon black into Banbury rubber compounding machines, with my ‘lamp black’ bonus I made $8.50 an hour.

    In 2022 dollars that’s $67.25 an hour. Rubberworkers always lagged behind autoworkers for pay so I’m pretty sure this is still less real pay than autoworkers got fifty years ago back when benefits were beneficial, gas was cheap and Richard Nixon was doing well except for the issues Kissinger advised him on. Same Kissinger advising Biden on the Middle East right now, btw.

    But back to my original point: $67.25 an hour in today’s money for a 20-year-old farm kid who just walked in off the street and was willing to get dirty (seriously dirty, coalminer dirty and did I mention the asbestos?).

      1. Kurtismayfield

        That is $188,000 per year. And the working class today gets treated to divide and conquer.

  6. marym

    > All three contracts will expire on April 30, 2028.

    “We went to each of the Big Three and proposed an expiration date of April 30, 2028. We did this for several reasons. First, this allows us to strike on May Day, or International Workers’ Day.

    We invite unions around the country to align your contract expirations with our own so that together we can begin to flex our collective muscles.”

    Thread starting at: https://twitter.com/UAW/status/1718800729266082186

  7. chuck roast

    My old man (an IBEW member) would have been proud of these guys. Fain & Co. had a great strategy, good PR and a dedicated rank and file. Best win for the working guys in many years.

  8. Joe Well

    So the workers can expect to make in the neighborhood of $80,000 a year.

    Can you buy a house in Michigan on that salary? Cuz you sure can’t here in Boston.

    May this be a first step to something bigger…

  9. Felix_47

    The manufacturers are already charging excess for pickups which is all they sell because of 25% tariff protection. They stopped making cars as a practical matter. In the 1970s the UAW had 1.5 million members. Now they have 400,000 active and 600,000 retirees. I was in the Union at Ford Mahwah back in the late 60s. They make as much as they can in Mexico at slave wages. They will make more in Mexico and China to compensate for what they they have to pay. I do not know why our trade negotiators did not demand that the UAW be allowed to represent the workers in Mexican and Chinese factories. All this wage increase and strike has done is divert more government money into the pockets of the Union memebers who were a small privileged group. Of course the CEO of GM is making 20 million per year in comparison to the CEO of Toyota who makes 7 million per year so performance at the executive and worker level of the US automakers is grossly overpaid. Anyone with a brain will do what they can to avoid US made vehicles. Despite that I must admit I drive a 2010 Chevy Tahoe. The same car now costs close to 70,000 but gas remains dirt cheap in the US so why switch? The industry is self destructing with the help of the government. My next one will be Korean or Chinese I guess. Without international unions I do not see how workers can compete with management. And international unions could raise the wages worldwide.

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