UAW reaches tentative agreement with Stellantis

Originally Published: 28 OCT 23 14:02 ET Updated: 28 OCT 23 18:42 ET By Chris Isidore, CNN

New York (CNN) — The United Auto Workers union has reached a tentative agreement with Stellantis, which makes vehicles under the Dodge, Ram, Chrysler and Jeep brands, the UAW announced Saturday evening.

“On Day 44 of our Stand Up Strike, I am honored to announce that our union is again victorious. Once again we’ve achieved just weeks ago what we were told was impossible, “UAW president Shawn Fain said in a video posted to X, formerly known as Twitter.

Although union negotiators and the automaker have a deal, it still needs to be presented to and signed off by union leadership before it is announced. The UAW National Stellantis Council will vote on whether or not to send the tentative agreement to the broader membership on November 2nd, Fain said.

The tentative agreement with Stellantis on Saturday follows a similar deal reached with Ford on Wednesday. The Ford deal still needs to be ratified by rank-and-file members at Ford before it can go into effect, just as the Stellantis deal will need the approval of membership as well.

The terms of the agreement with Stellantis are not yet known. But it is expected to be roughly along the same lines as the Ford deal, which would mean an immediate minimum 11% raise for all 43,000 of the UAW members at Stellantis, and additional pay increases that would bring total raises to 25% during the four-and-half year life of the contract. It is also expected to include a cost-of-living adjustment (COLA) to wages to protect members against rising prices.

The COLA was something the union gave up when Stellantis predecessor Chrysler was in dire straights and headed towards bankruptcy and a federal bailout. But Stellantis has seen a recent boon, with the company now making record profits. The guaranteed wage increases, combined with COLA, could raise total wages by more than 30% during the life of the contract.

A source with knowledge of the situation also said that negotiators are close to a tentative agreement with General Motors. The union and GM declined to commenton the status of their negotiations. A spokesperson for GM said only that negotiations are continuing.

Ford’s deal gives union workers sizeable pay and benefits increases to contend with inflation that has taken a bite out of workers paychecks. The last contract was reached in 2019, before runaway price hikes began in the wake of the pandemic.

The automakers typically offer union members similar deals across companies, so the GM negotiations are expected to yield similar benefits for the autoworkers.

If agreements with the Big Three are reached and ratified, it would likely put an end to the longest autoworkers strike in 25 years.

Ford deal may have served as a template

In addition to the pay increases in the Ford deal, the union has also won improved pension benefits for senior workers who have a traditional pension plan, and increased company contributions to 401 (k) accounts of workers hired since 2007. But the union did not get its goal of a resumption of traditional pension plans for those post-2007 hires, or for a return of retiree health care coverage.

The union also won improved job guarantees, including the right to go back on strike to protest a plant closing during the life of the contract. Previous contracts always included a no-strike clause while the contract is in effect.

The ratification process at Ford is due to start Sunday with a meeting in Detroit of local union officials who represent company workers around the country. While the deal includes record gains for the union, with double-digit pay increases, ratification is not certain.

When will the strike end?

Generally a union will not have strikers return to work until a tentative labor agreement has been ratified. But the UAW had workers return to work at Ford while the ratification process is underway. That stepped up pressure on GM and Stellantis to quickly reach their own deals with the union.

“The last thing they want is for Ford to get back to full capacity while they mess around and lag behind,” said UAW Vice President Chuck Browning, the union’s chief negotiator at Ford, in comments to members Wednesday night.

Some members have already returned to work at Ford as the company prepares to resume operations, said Todd Dunn, UAW Local 862 president, who represents workers at Kentucky Truck Plant, Ford’s largest factory. Others are due back on Saturday. The plan is that by Monday, the plant will be running at full capacity, he said.

But it’s not clear when the members at Stellantis would return to work, if they would stay out during the ratification process, or if they would also return to the job and receive regular paychecks. The $500-a-week strike benefits from the UAW are a fraction of what they earned while on the job.

A new strategy for the union

The union has been on strike since September 15 against GM, Stellantis and Ford, the first time the union has ever struck all three companies at once. The union represents 145,000 workers between the three companies, but it did not have all of its members go on strike.

Instead, it has been conducting targeted strikes at specific plants. It began with 12,700 members walking out at one assembly plant at each company, and it has expanded the scope of the strike five times since then. At the time the Ford deal was announced, there were 16,600 members on strike at Ford, 14,200 on strike at GM and 14,600 on strike at Stellantis.

Most recently the union had 6,800 members walk out at the Stellantis plant in Sterling Heights, Michigan, on Monday, and 5,000 members go on strike at the largest GM plant in Arlington, Texas, on Tuesday, shortly after GM reported stronger than expected quarterly earnings.

In its earnings report, GM reported that it lost $200 million over the first two weeks of the strike in late September, and it lost another $600 million in the first three weeks of October. But the closing of the Arlington plant alone is likely to cause losses of an additional $130 million a week, according to an estimate from Colin Langan, an auto analyst with Wells Fargo.

Stellantis has not given a loss estimate from the strike, but Langan estimates the Sterling Heights plant being on strike raises its weekly losses by $110 million a week to $200 million.

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