UAW Presses On, Automakers Plan Cuts

Contract approvals follow record results achieved by “Stand-Up” strikes, but automakers warn cost cuts are on the horizon to pay the tab.

Joseph Szczesny

November 21, 2023

5 Min Read
UAW Fain Getty
UAW leader Fain’s unorthodox strategy changed negotiations.Getty Images

After approval by 64% of the union’s members, the United Auto Workers says its new contracts covering 150,000 hourly workers by the Detroit Three automakers are now in place and the UAW is preparing to move on to organizing non-union workers across the auto industry.

Ford, General Motors and Stellantis say they will now focus on cutting costs to pay for labor agreements that are the most expensive in the industry’s history.

“The members have spoken. After years of cutbacks, months of our ‘Stand-Up’ campaign, and weeks on the picket line, we have turned the tide for the American autoworker,” says UAW President Shawn Fain.

The “Stand-Up” strike was just the beginning,” says Fain, who put his personal stamp on the negotiations with the “Stand-Up Strike” strategy, extensive use of social media and uncompromising personality, which rattled executives at all three companies.

“The UAW is back to setting the standard. Now, we take our strike muscle and our fighting spirit to the rest of the industries we represent, and to millions of non-union workers ready to stand up and fight for a better way of life.”

Union members have “won back major provisions that were sacrificed during the Great Recession, from cost-of-living adjustments to annual bonuses for retirees, to the elimination of wage tiers,” according to the UAW.

The agreements include substantial wage increases for all Detroit Three members and “life-changing raises” for tens of thousands of members laboring through the eight-year progression to top pay or as temporary workers.

For the first time in 15 years, the contract also includes pension improvements for both active members and retirees, the UAW notes in its statement.

All three automakers say they are happy to put the tumultuous negotiations and seven weeks of strikes behind them.

“We are pleased our team members have ratified the new agreement that rewards our employees, protects the future of the business and allows us to continue to provide good jobs in communities across the U.S.,” says GM Chair and CEO Mary Barra, while signaling she is preparing to make cuts. “We can now move forward as one team doing what we do best – delivering great products for our customers and winning together.”

Ford, in a statement, says “We are pleased the agreement has been ratified and we are very happy for our more than 57,000 UAW-represented employees and their families. Ford believes in rewarding all of our people and growing the middle class in America – and we have shown that with our actions over many years.”

“It’s also imperative that we continue to attack cost and waste throughout our operations. The reality is that this labor agreement added significant cost, and we are going to have to work very hard on productivity and efficiency to become more competitive,” Ford adds.

Ford is working to reach full production schedules in the coming days at its assembly plants in Michigan, Kentucky and Illinois that were affected during the strike.“I’m excited to personally get out to as many of our plants and operations as possible in the coming weeks and months to spend time with our teams who build our vehicles,” says Ford CEO Jim Farley.

Stellantis also is confirming it was notified by the UAW the new contract had been ratified by UAW members.

“With negotiations now officially behind us, we will focus our full attention on executing our Dare Forward 2030 strategic plan and serving our customers by delivering the high-quality products and technologies they want and expect, especially as we prepare to launch eight all-new electric vehicles in the U.S. market in 2024,” says Mark Stewart, chief operating officer, Stellantis North America.

At the end of the fight for new contracts, distribution of wages in the 54-month contract became one of the final sticking points as union members voted on the agreements this month. Union members at GM narrowly approved the contract 55% to 45%, while production workers at the automaker’s assembly plants voted down the agreement, saying the raise was insufficient to make up for past concessions. But younger workers, and workers employed at component plants where the wages had been reduced below the $32 per hour, voted overwhelmingly for the agreement.

Union members at both Stellantis and Ford approved the agreement by comfortable margins of two to one.

Declaring victory, UAW officials note the contracts and tens of billions of dollars in future products and plant-investment commitments shore up job security for UAW members. “After decades of deindustrialization and working-class decline, the new contracts pave the way for a future of reindustrialization and working-class power,” the union says.

The specifics include Stellantis agreeing to reopen an assembly plant in Belvidere, Ill. it shuttered in February, committing to build a $3.2 billion battery plant there employing more than a thousand union workers. The company was slated to shed more than 5,000 U.S. hourly jobs when bargaining began. It is now on track to add more than 5,000. Stellantis last week offered buyouts to half its salaried workers as part of its cost-cutting push.

Additionally, the UAW won commitments at all three automakers that will bring thousands of new electric-vehicle and battery jobs under the new contracts.

Fain also wants to bring workers at non-union plants across the industry into the UAW. The new contracts, however, are prompting companies such as Toyota, Honda, Hyundai and Subaru to raise wages for their production workers.

Bringing the workers under contracts negotiated by the UAW is likely to prove more difficult, according to experts.

“The labor law and union-busting law firms make it very tough to organize in right-to-work states. Even after Starbucks got 350 of their stores voting yes for a union, they have zero collective bargaining agreements. Nothing in labor forces companies to say yes,” says Arthur Wheaton, a labor expert from Cornell University in Ithaca, N.Y.


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