United Auto Workers union leaders approved a new tentative contract agreement Sunday with Ford Motor (F.N) that includes $8.1 billion in company manufacturing investments, while bargaining continues at General Motors (GM.N) without any deal.
The UAW-Ford contract could give workers up to $70,000 in extra pay over the 4- 1/2-year life of the contract, before enhanced profit sharing and retirement contributions, UAW officials told members in a video Sunday.
The top rate for workers will rise to $42.60 per hour by 2028, including estimated cost of living allowances. The company will also offer $50,000 buyouts for workers and the new contract eliminates all lower wage tier plants.
The UAW posted terms of its new contract deal with Ford after talks with local union leaders in Detroit, before taking the deal to all union workers for ratification.
Ford will add electric vehicles to existing assembly plants in Louisville and Ohio, according to the UAW summary of terms.
The Ford investments include several new hybrid models, including gas-electric hybrid versions of Ford’s largest SUVs, the Lincoln Navigator and Ford Expedition. Ford CEO Jim Farley has outlined plans to invest more in expanding the automaker’s hybrid lineup, even as it scales back plans to expand capacity for fully electric models.
The deal includes a $5,000 ratification bonus, special retirement incentive packages and gives newly-hired temporary workers a faster path to full-time status and the top union pay rate. Workers also get a $1,500 voucher toward a vehicle purchase and heftier company contributions for retirement benefits.
Existing Ford temporary workers immediately become permanent employees on track for top pay within three years and the deal creates a pathway for workers at joint ventures, battery plants, and Ford’s BlueOval city electric vehicle complex in Tennessee to join the union, and be covered under the master contract.
GM and Ford shares have fallen roughly a fifth since the beginning of the strike on Sept. 15. Stellantis shares are down just 1%.
It is not clear what derailed GM and the UAW’s progress toward an agreement patterned after earlier deals at Ford and Chrysler-owner Stellantis (STLAM.MI) but sources said one key issue was retiree pension costs. Those deals won workers a record 25% jump in wages over the 4-1/2-year contract and allowed the automakers to restart their profitable truck assembly lines.
UAW President Shawn Fain on Saturday ordered a walkout at GM’s Spring Hill, Tennessee engine and assembly plant, criticizing management’s “unnecessary and irresponsible refusal to come to a fair agreement.”
Fain met with union leaders on Sunday to go over the agreement before officials agreed to submit the deal to the full membership for a ratification vote.
GM said it was disappointed by the UAW decision to strike Spring Hill.
The Spring Hill walkout could hobble GM’s large pickup production as well as assembly of other popular GM vehicles. Ripple effects from an extended Spring Hill strike could boost the costs of the stalemate for GM well beyond the $400 million a week the company reported last week.
UAW counsel Benjamin Dictor on Sunday morning posted on the social media site X, formerly known as Twitter: “All my homies hate companies that won’t agree to fair contracts for their workers.” He later deleted the post.
GM is now the only Detroit automaker without a deal. Stellantis reached agreement with the UAW on Saturday and Ford on Wednesday.
At Ford, union leaders will now fan out to regional meetings to explain the deals to members, who will then vote on whether to approve it.
UAW leaders no longer can take ratification votes for granted. Last month, UAW workers at Mack Truck’s U.S. operations overwhelmingly rejected a deal recommended by Fain, while Mack said Thursday no new talks are scheduled. In 2015, UAW members at what is now Stellantis voted down a contract endorsed by union leadership.
Fain said on Saturday that local union leaders at Stellantis plants will come to Detroit on Nov. 2 before the agreement is sent to members for ratification.