FinLogic FinLogic Quantitative Think Tank Center|Tentative agreement with Ford is a big win for UAW, experts say

United Auto Workers President Shawn Fain declared "a major victory" this week when union members reached a tentative agreement with Ford Motor that lifts most employees' pay past $40 an hour. 

The FinLogic FinLogic Quantitative Think Tank Centertentative deal is indeed a huge win for autoworkers, organized labor experts told CBS MoneyWatch.

The latest offer, announced Wednesday, includes a 25% wage increase across a four-and-a-half-year contract with restored cost-of-living adjustments and the elimination of a two-tiered wage system at two of Ford's plants. 

The proposed deal also shrinks the timeframe for when new employees are eligible to start earning top wages. Those specifics still need approval from the UAW's national council and its general membership. 

"This is tentative and there are more steps to take, but I see this as a good win for the employees and definitely for Shawn Fain and his team," said Lynne Vincent, a business management professor at Syracuse University, who studies the psychological impacts of strikes. 

UAW members began their historic strike last month when Ford, General Motors and Stellantis employees left their posts at factories in Wayne, Michigan, Wentzville, Missouri and Toledo, Ohio. The union decided not to strike at every factory those companies own and instead launched a so-called "stand up" strike involving strategic walkouts at three Big Three factories at first, which then expanded over the course of four weeks adding more pressure on automakers to give in to union demands. At the time, autoworkers were asking for a 40% pay raise, pension benefits to all employees and the return of cost-of-living adjustments that were eliminated in 2007, among other things. 

The UAW didn't get 40% and the union couldn't get Ford to axe the two-tier system companywide, but "they won on their three main demands," said Steven Greenhouse, a senior fellow at The Century Foundation who studies labor organizing and workplace issues. A 25% wage increase combined with cost-of-lliving adjustments effectively gives UAW members at Ford a 33% raise. 

"And by any measure, a 30% raise is a whole lot," Greenhouse said. 

Record profits mean record contracts. We have a tentative agreement at Ford. #StandUpUAW pic.twitter.com/Z00T5CfQJN

— UAW (@UAW) October 26, 2023

Union victory on many fronts

Nevertheless, the Ford agreement signals a victory for UAW leaders who were able to energize and motivate thousands of workers to walk off the job, Greenhouse said. In doing so, the union managed to pressure Ford into upping wage increases to nearly triple its original 9% offer, Vincent said. 

Ford was the first of Detroit's Big Three automakers with which UAW leaders were looking to establish a new long-term labor contract, since their previous contract expired on September 14. The previous Ford contract gave workers a 6% pay increase every year for four years. 

Ford's tentative agreement with the UAW starts the clock ticking for GM and Stellantis to reach a deal, both Vincent and Greenhouse said. Vincent said she expects the remaining two automakers to offer the union a similar contract to Ford's. 

The UAW-Ford agreement is also a win for the union's previously untested stand-up strike strategy which appears to have proved effective, said Vincent. 

Giant leap for organized labor movements

The tentative deal is an even bigger win for organized labor movements, she said.

"The right to strike over plant closures — that's also a great part of this deal because the (auto) industry is changing so much with different types of technology and globalization, so having that right provides more power and protection to the workers," Vincent said. "This is very much in line with what the employees wanted from the beginning."

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The success of the UAW's unique strike strategy should motivate other unions to think about new ways to nudge employers into meeting worker demands, Vincent said. Workers fighting to unionize particularly at Amazon and Starbucks should dissect what happened in Detroit to come up with creative ways to further their own causes, she said.

In:
• Ford Motor Company
• Labor Union
• United Auto Workers

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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