Ford Motor Company and the negotiators of the United Auto Workers (UAW) union reached a labor deal on Wednesday, pending union leadership approval.
A deal would be the first settlement of strikes against Ford, General Motors and Stellantis.
More than 45,000 union members working at the Detroit Three automakers have joined walkouts that began on 15 September.
The deal is expected to provide a 25% wage hike through the life of the contract, including 11% to start, one of the sources said. Including compounding and cost of living, workers will get more than 30% under the tentative deal. The agreement will also reportedly reduce the time it takes new workers to reach the maximum wage –from eight to three years.
If agreed, the union deal will be one of several major wins for the US unions over the last few months following agreements for double-digit pay rises at parcel giant UPS, Hollywood writers and health workers at Kaiser Permanente.
In a video posted on X, Shawn Fain, the UAW president said: “We reached an historic agreement.”
“For months, we said that record profits mean record contracts. And UAW family, our stand-up strike has delivered.” He said union leaders would seek to get the deal finalized over the weekend before seeking approval from members.
Getting the deal ratified will be up to Fain and UAW leaders, and it is not assured. UAW workers at Mack Truck earlier this month rejected a proposed contract agreed to by Fain. UAW workers at the company now called Stellantis rejected a proposal endorsed by UAW leaders in 2015.
The UAW’s most recent move was to strike against each company’s most profitable plants – GM’s Arlington, Texas, assembly plant; Ford’s truck heavy-duty pickup factory in Kentucky; and Stellantis’ Ram pickup plant in Sterling Heights, Michigan.
Total economic losses from the UAW strike have reached $9.3bn, the Anderson Economic Group said this week.
If the contract is ratified by Ford-UAW workers, it would set the standard for bargaining at General Motors and Stellantis, and expire in 2028.
“This lays the groundwork for the next two contracts and they should fall in line fairly quickly because all three were within a narrow gap of each other,” said Sam Fiorani, the vice-president of global vehicle forecasting, at AutoForecast Solutions.
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“The strike so far has been painful for everybody and knowing what it takes to get a signed contract should bring them to the table much quicker,” he said.
The three companies had no immediate comment.
The union has waged an unusual campaign of simultaneous strikes against the Detroit Three automakers, demanding a 40% wage hike, including a 20% immediate increase, improvements in benefits, as well as covering EV battery plant workers under union agreements.
The automakers have argued that the UAW’s demands will significantly raise costs and hobble their electric vehicle ambitions, putting them at a disadvantage when compared with Tesla and foreign brands such as Toyota, who are non-unionized.
Rather than the hammer blow of a mass walkout it has wielded historically, the UAW has played the companies against each other, using reprieves from expansion of work stoppages as encouragement.
Reuters contributed to this article
