End of Six-Week Strike: UAW Contract Breakdown
The United Auto Workers’ (UAW) protracted six-week strike against Detroit’s Big Three automakers is coming to a close, as union leaders have successfully secured tentative agreements with Ford, General Motors, and Stellantis for new labor contracts. These agreements have been seen as a triumph for the UAW and its 146,000 members, despite not fulfilling all of the union’s demands.
A Strategic Victory
Experts in labor relations view these enhanced pay and benefits as a victory for the UAW. While UAW chief Shawn Fain did not achieve all his objectives, including the sought-after 32-hour workweek, the UAW’s hardline negotiation tactics have evidently paid off. According to Lynne Vincent, a business management professor at Syracuse University, “The UAW’s strategy to negotiate with and strike at the three automakers simultaneously paid off with seemingly strong agreements at all three organizations.”
Consistent Top-Line Benefits
Although the details of the agreements may vary slightly, workers at each of the automakers will enjoy the same top-line benefits. Specifics about the terms for employees at Stellantis and GM have not been disclosed yet. However, here’s an overview of what unionized autoworkers can anticipate in the new labor deals:
All workers at the Big Three automakers will experience a substantial 25% boost in their hourly wages over the contract’s four-and-a-half-year duration. In their previous contract from 2019 to 2023, employees at these automakers received an annual wage increase of 6%.
Under their specific agreement, Ford and Stellantis workers will see an immediate 11% wage increase. While GM and the UAW did not immediately specify wage increases, the impact is expected to be significant.
For instance, hourly wages at Ford will surge from $32.05 to $42.60 for assembly-line workers and from $36.96 to $50.57 for skilled trades employees, as outlined in the preliminary contract. Specific hourly wage details for GM and Stellantis are yet to be disclosed.
Cost of Living Adjustments (COLAs)
In addition to wage increases, employees at the Big Three will receive regular cost of living adjustments (COLAs). At Ford, this increase will be based on a three-month average of changes in the consumer price index, with the first COLA payment expected in December. While GM and Stellantis have not released precise details about their COLA payments, they are likely to be similar.
The automakers had ceased offering COLAs back in 2007 during challenging financial times shortly before the housing crash.
Swift Progress to Top Wages
The newly hired factory workers at the Big Three automakers will ascend to the top wage tier more rapidly. For example, at Ford and Stellantis, full-time employees will reach the top pay rate after just three years on the job. In the previous contracts, it took workers eight years to attain the highest salary tier.
Elimination of the Two-Tier Wage System
A significant achievement by the UAW was persuading automakers to abolish the two-tier wage system, which was introduced in 2007 during the companies’ financial struggles. This system allowed employees hired after that year to earn significantly less than their longer-tenured colleagues for the same work.
Under the new agreements, two tiers have been eliminated at Ford’s Sterling Axle in Sterling Heights, Michigan, and Ford Rawsonville in Ypsilanti, Michigan. Similarly, the two-tier system has been done away with in the company’s auto parts supply division, Mopar, according to the Stellantis deal.