Oct 26, 2023 - Economy

Ford workers have power to say yay or nay on UAW settlement

Illustration of a finger pointed upwards, balancing a pen

Illustration: Annelise Capossela/Axios

In the tentative settlement between Ford and the UAW, the emphasis should be placed on tentative.

Zoom in: While Ford's concessions are significant wins for the union, workers must accept the deal for it to be finalized — and that's far from guaranteed.

Catch up fast: The two sides announced late Wednesday that they've reached a deal to end their labor dispute, with the UAW saying Ford agreed to:

  • A 25% average base wage increase through April 2028.
  • A 30% increase on the top wage to more than $40 per hour.
  • A 68% boost to the starting wage, making it more than $28 per hour.
  • The return of cost-of-living adjustments, the demise of wage tiers, permanent jobs for temp workers and boosts to retirement income, including 401(k) contributions.

Between the lines: "Don't let them tell you it can't be done. The working class is going on offense, and winning," UAW president Shawn Fain said on X, formerly known as Twitter.

But, but, but: Despite the union wins in the Ford agreement, Fain asked for several things he apparently didn't get — a 32-hour workweek and a return to traditional pensions, for example.

  • And it's unclear whether members — who saw the union relinquish some of its most lucrative benefits to help the Detroit Three automakers survive the financial crisis — will be fuming or understanding.
  • Fain will now need to turn his attention to convincing members that the settlement is worthy of ratification.

What they're saying: "In any situation like this, workers have high expectations," said Rebecca Kolins Givan, a labor expert at Rutgers University. "In this case they have high expectations because they knew what the company was making in profits and they felt like they had settled for too little for too many years."

  • She adds: "The question is always, 'Could we get more by staying on strike longer?'"

Worth noting: There's recent precedent for UAW workers rejecting a deal agreed to by their negotiators:

  • Earlier this month, UAW-represented Mack Trucks workers went on strike after voting down a five-year deal.
  • Afterward, Fain acknowledged workers' disappointment and said the union would fight for a better deal.

In the last two weeks, Fain appeared to set the stage for the likelihood that the union wouldn't get everything it demanded from the Detroit Three, even as he declared an early victory for winning "record contracts."

  • He said on Oct. 13 that it was time for the union "to see how close we can get to economic and social justice" — the implication being that it might not get it all.
  • "This is a record setting contract that has two decades worth of typical gains based on recent contracts," Givan says. "And these workers are smart. They know that you don't get everything in any contract even after an extremely successful strike."

What's next: From a historical perspective, a deal with one automaker typically sets a pattern for a deal with the others, meaning settlements with General Motors and Stellantis may be imminent.

  • Experts believe the fact that Ford employees are immediately returning to work — rather than staying on strike until ratification — will put pressure on GM and Stellantis to settle quickly.
  • GM and Stellantis will likely "follow suit quickly with such a trivial gap now remaining," Evercore ISI analyst Chris McNally wrote Thursday.

Go deeper: Ford and UAW reach tentative labor deal that would end strike at automaker

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