Ford Motor Co. and the United Autoworkers union have reached a tentative agreement on a new four-year contract, ending a two-week strike at Kentucky Truck Plant in Louisville and calling back striking members at Ford plants in Michigan and Illinois.
While the union didn’t achieve all its demands, the agreement provides substantial wage increases, enhanced retirement contributions, and the restoration of inflation-protected pay rates, according to UAW President Shawn Fain in a video statement on Wednesday evening.
Fain mentioned that Ford increased its offer by 50% from before the strike on September 15, saying, “We told Ford to pony up, and they did. We won things no one thought possible.”
Ford confirmed the deal and expressed eagerness to get workers back to work in the three striking assembly plants. However, this deal still needs to be ratified by Ford’s approximately 57,000 UAW members in a vote, but it could set the precedent for agreements with General Motors and Stellantis, putting pressure on them to negotiate.
The agreement includes a 25% general wage increase over the four years, along with cost-of-living raises, pushing the total pay increase to over 30%, exceeding $40 per hour. This estimate includes an 11% increase that takes effect upon contract ratification.
The “top rate” hourly wage, which is projected to be $40-plus, will be attainable in a shorter time, with the “progression” from entry-level pay to the top wage reduced to three years from the current eight years. The starting wage for full-time, non-temporary employees is expected to increase by 68%, which translates to a new starting wage of approximately $30 per hour.
The UAW had sought to restore traditional defined-benefit pensions and retiree health coverage for all workers, but these specifics were not mentioned in the video. Workers with 401(k)-style retirement plans will receive higher contributions from Ford, with the company willing to increase contributions from 6.4% of wages to 9.5%. The mention of “annual bonuses” was made regarding retirees, but no further details were provided.
The next step involves the UAW National Ford Council voting on Sunday to decide whether to send the agreement to workers. If approved, the UAW plans to livestream more details publicly on Sunday evening, followed by local meetings with members to address their questions about the deal.
The agreement comes after the UAW escalated the strike by involving Kentucky Truck Plant, which had about 8,700 hourly workers on strike, resulting in a significant impact on Ford’s annual revenue. Under UAW President Shawn Fain’s leadership, the union departed from its traditional approach and chose to negotiate simultaneously with all three major automakers.
As of Wednesday, around 46,000 UAW members were on the picket line, with thousands more laid off due to the labor action. The union also expanded the strike to include Stellantis and General Motors factories. Despite some members urging resolution, Fain assured them that there is more to be gained.
On the picket line in Louisville, workers expressed their willingness to wait for as long as UAW leaders asked. Inflation had eroded gains, but adjustments similar to the pre-2009 concessions are returning to protect autoworker wages from inflation.