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UAW and Ford finalize $8.1 billion contract agreement. All you need to know
United Auto Workers has transparently shared the terms of its new contract with Ford following discussions with local union leaders in Detroit. The contract is now open for ratification by all union workers
The United Auto Workers (UAW) union leaders have approved a new tentative contract agreement with Ford Motor on Sunday, October 29; which includes a substantial $8.1 billion investment in company manufacturing. Meanwhile, negotiations at General Motors (GM) are ongoing without any finalised deal.
Promised Benefits for UAW-Ford Workers
Under the UAW-Ford contract, workers may receive up to $70,000 in additional pay over the contract's 4-1/2-year duration, before considering enhanced profit sharing and retirement contributions.
The top hourly wage for workers is set to rise to $42.60 by 2028, which includes estimated cost of living allowances.
In addition, the contract offers $50,000 buyouts for workers and eliminates all lower wage tier plants.
The agreement also includes a $5,000 ratification bonus, special retirement incentives, and a faster path to top union pay rate for newly-hired temporary workers.
Workers will receive a $1,500 voucher towards a vehicle purchase and increased company contributions for retirement benefits.
Existing Ford temporary workers will transition to permanent employee status, moving towards top pay within three years. The contract also paves the way for workers at joint ventures, battery plants, and Ford's BlueOval city electric vehicle complex in Tennessee to join the union and be covered under the master contract.
As part of the investment, Ford plans to introduce electric vehicles (EVs) to its existing assembly plants in Louisville and Ohio. This includes the production of new hybrid models, including gas-electric hybrid versions of the Lincoln Navigator and Ford Expedition.
Ford's CEO, Jim Farley, has emphasised the company's commitment to expanding its hybrid lineup.
The UAW has transparently shared the terms of its new contract with Ford following discussions with local union leaders in Detroit. The contract is now open for ratification by all union workers.
Ratification in the bag?
UAW leaders now face the task of explaining the Ford contract to members, who will ultimately vote on its approval. It's worth noting that UAW leaders can no longer take ratification votes for granted, as there have been instances of contract rejections in the past.
Local union leaders at Stellantis plants are set to come to Detroit on November 2 before the agreement is presented to the members for ratification.
Challenges at GM
General Motors and the UAW are still in negotiations, and it remains unclear what has hindered their progress towards an agreement, following earlier deals at Ford and Stellantis (Chrysler's parent company).
One key issue reportedly revolves around retiree pension costs. The earlier deals led to a significant 25 percent wage increase over the 4-1/2-year contract for workers and allowed the automakers to resume profitable truck assembly operations.
UAW President Shawn Fain ordered a walkout at GM's Spring Hill, Tennessee engine and assembly plant, criticizing management's refusal to reach a fair agreement. This walkout could impact GM's large pickup production and the assembly of other popular GM vehicles.
The cost of the strike for GM may exceed $400 million per week.
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Business NewsAuto NewsUAW and Ford finalize $8.1 billion contract agreement. All you need to know
First Published:30 Oct 2023, 06:52 AM IST
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