Workers at Ford and Stellantis overwhelmingly voted to approve new contracts laying out historic pay raises over the next 4-1/2 years.
Over the weekend, members of the United Auto Workers representing Ford and Stellantis plants voted to ratify the deals struck between union leadership and the automakers after a tense six-week long strike. These deals, along with a similarly ratified contract with General Motors, bolster the bottom lines of all impacted workers and forcing automakers to provide some assurances as the industry gradually transitions away from internal combustion-fueled vehicles toward electrified models.
Per an Associated Press report, Stellantis workers approved their respective deal by around a 10,000-vote margin, as voting on the contract ended Saturday afternoon. 69.3% of Ford workers, for their part, were in favor of the new contract — a margin of nearly 15,000 votes as balloting also ended on Saturday. Earlier in the week, GM workers approved the deal with the UAW, though by a slimmer majority.
The three agreements, which run through April 2028, cement terms struck after a summer of failed negotiations and a widespread strike against most of the Big Three’s most lucrative manufacturing plants. Union leadership finally reached a breakthrough and reached tentative deals with the automakers in late October.
Under the settlement, union workers receive beneficial pay raises, as well as better retirement benefits and the end of a multi-tiered wage system that originally went into effect in 2007. To accommodate the terms, all of the Big Three automakers cut costs, such as Stellantis reportedly offering buyouts to part of its non-unionized workforce and pulling out of major auto shows.
While we won’t know the far-reaching effects of the strike and the resulting deals for months and years to come, some noted the costs of the labor actions and settlements would be passed onto the consumer. Ford CFO John Lawler, for example, said the company’s deal would increase labor costs by $850 to $900 per vehicle. However, in a competitive market with cooling demand, high interest rates and record-shattering transaction prices, market conditions afford automakers little wiggle room to raise prices without potentially cratering sales volumes.
