Workers at Stellantis, the manufacturer of Jeep, Dodge, and Ram vehicles, voted 68.8% in favor of the agreement. Their approval brought to an end a contentious labor dispute that included name-calling and a series of punitive strikes that imposed high costs on the companies and led to significant gains in pay and benefits for UAW workers.
The Stellantis deal passed by a margin of about 10,000 votes, with vote counts ending Saturday afternoon.
Also read: UAW Workers at GM’s Largest Factory Backyard Labor Pact, Boosting Chances of Agreement
Workers at Ford voted 69.3% in favor of the pact, which passed by a nearly 15,000-vote margin in a poll that ended early Saturday. Earlier this week, GM workers narrowly approved a similar contract.
The Long Battle
The agreements, which run until April 2028, will end contentious negotiations that began last summer and led to six-week strikes at all three automakers. Shawn Fain, the militant new UAW leader, branded the UAW’s enemy companies, which were led by overpaid CEOs, declaring that the days of union cooperation with the automakers were over.
After summer-long negotiations failed to produce an agreement, Fain initiated strikes on September 15 at one assembly plant at each company. The union later extended the strike to parts warehouses and other factories to try to intensify pressure on the automakers until tentative agreements were reached in late October.
The new contract agreements were widely seen as a victory for the UAW. The companies agreed to dramatically raise wages for high-end assembly plant workers, with cost-of-living increases that would translate into 33% wage gains. Top workers at the assembly plant will receive immediate 11% raises and will earn about $42 an hour when the contracts expire in April 2028.
Also read: Automakers fear long-term fallout from UAW strike
Under the agreements, the automakers also ended many of the multiple tiers of wages they used to pay different workers. They also agreed in principle to bring new electric battery factories into the national union contract. This provision will give the UAW an opportunity to unionize the EV battery factories, which will represent a growing share of industry jobs in the coming years.
“I think this is a huge win for the UAW that they ratified all three contracts,” said Art Wheaton, director of labor studies at Cornell University. “It lifts the boats of all or many auto workers.”
Three non-union, foreign automakers in the United States—Honda, Toyota, and Hyundai—quickly responded to the UAW contract by raising wages for their factory workers. They did so after Fain said the UAW would make an aggressive effort to unionize their plants. He also said the union would try to recruit workers at Tesla.
Foreign automakers have argued in the past that their workers earn roughly the same as UAW members, thereby negating the need for a union. They also accused the UAW of forcing GM and the former Chrysler into bankruptcy in 2009 and engaging in corruption after federal prosecutors broke up a wide-ranging bribery and embezzlement scandal since 2017.
Read also | The UAW’s Strike Strategy: Lots of Attention, Dumb Financial Pain for Now
But with Fain’s election and the new contracts, the union “cured or readjusted all of that rhetoric,” Wheaton said.
While wages in non-union factories may be nearly equal, he said, UAW workers receive much better health care and retirement benefits, which is likely to be attractive to workers at non-union factories as they age.
Contracts with the auto companies should also lead to higher wages at supplier companies and in other industries, Wheaton said.
“The union has a lot more power” because of the agreements, said Mark McGill, a 67-year-old worker at Ford’s assembly plant in Wayne, Michigan, where workers have been on strike for the entire six weeks. “Look at everybody now. People want to unionize.”
McGill, a 28-year Ford veteran who helps assemble Ford Bronco vans and Ranger pickups, said he’s glad he’ll be making $42 an hour by the end of the contract. He’s also happy that Fain’s negotiators were able to persuade Ford to pay workers about $100 a day during the time they were on strike.
But under the settlement, new hires and temporary workers will receive much larger wages than longtime assembly line workers, with some more than doubling their wages. That thing almost sank the contract at GM. Wheaton noted that raising wages for the lowest paid workers has been a focus of the union movement in the United States over the past year.
Perspective
All three automakers reported millions in lost revenue from the strikes and said they would absorb at least some of the increased costs of the wage increases in a competitive market that makes it difficult to raise prices. John Lawler, Ford’s chief financial officer, said its deal will raise labor costs by $850 to $900 per vehicle. All three companies said they had already cut other costs in preparation for the UAW settlements.
Also read: General Motors withdraws previous guidance for 2023 profits after UAW strike costs rise
Michelle Krebs, an analyst at Cox Automotive, said a slowing U.S. auto market and already inflated prices that have made new vehicles unaffordable for many people will make it harder for companies to charge more.
Cox forecasters predict flat U.S. auto sales next year. Krebs said slowing demand but rising factory output will likely produce more discounts. In addition, auto loans hover around 10% on average, a rate that will further slow auto sales while raising monthly payments.
The union’s success in securing significant wage gains could provide a political boost to President Joe Biden, who visited workers on a Detroit-area picket line and traveled to Belvidere, Illinois, Cornell’s Wheaton said. There, the union won a commitment from Stellantis to reopen a closed factory and even add an EV battery plant.
Also Read: US auto strike puts Indian aid hubs on edge
Biden, the first president in memory to visit a union picket line, presented himself as a champion of the working class who emerged from a blue-collar background in Scranton, Pennsylvania. The strikes, Wheaton noted, did not hurt the economy, but did result in higher wages for middle-class workers, whose votes Biden needs as he seeks a second term.
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This story was published by a wire agency feed without modifications to the text.
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Updated: 19 Nov 2023, 06:58 IST